Blind spots on our solar future
The new Grattan Institute report "No quick fix for Australia’s future energy challenge" contains misleading comparisons, flawed analysis and glaring omissions on the vital energy issues confronting Australia.
Firstly the report makes a misleading comparison between the cost of wholesale fossil fuel electricity and the cost of solar photovoltaic electricity which currently competes in the retail electricity market.
We do not expect Coles and Woolworths in their customer facing supermarkets to compete with the prices at the Footscray Wholesale Fruit and Veg market or with grocery wholesaler Metcash. It is completely misleading for the Grattan Institute to ignore the differences between the wholesale and retail markets.
Rooftop Solar photovoltaic has halved in price in the last 24 months. This is a staggering cost reduction and is in stark comparison to rapidly increasing gas prices. And what's more, solar prices will continue to fall if support is reduced in a sustainable manner.
Secondly, the report claims that there are no viable energy storage options for renewable energy.
It ignores solar thermal (Molten Salt Power Towers with integrated thermal storage tanks) that is already commercially deployed in baseload, intermediate and peaking configurations in Spain and under construction at a number of sites in the US. This technology is commercially available, off the shelf and ready for deployment in Australia. Rapid cost reductions have been projected by the International Energy Agency, the US Department of Energy and others.
Furthermore, Renault-Nissan's CEO is claiming that its Li-On battery technology, which can be used with Solar Photovoltaic, could be as low as $190 per kilowatt hour by 2014.
Thirdly, the report recommends the "elimination" of Feed-in-Tariffs in Australia. Feed-in-Tariffs do not distort the market as suggested by the Grattan Institute and are more effective than a carbon price in deployment of appropriate renewable energy technologies. If Feed in Tariffs were “eliminated”, as suggested by the Grattan Institute, Australia would lose one of only two very successful significant scale zero carbon policies. Last year the Feed-in-Tariffs achieved over $5 billion dollars in new energy investment, more than was spent on any other source.
The Feed-in-Tariffs have also achieved significant lowering of the country's wholesale electricity costs and real reduction in carbon emissions as well as driving down the cost of future installations of the technology through the Merit Order Effect as outlined by the University of Melbourne Energy Institute.
Further to the above three points, it is unreasonable to assert that mapping of renewable resources is the major requirement for renewable deployment – we know where the good wind and sun is, the Bureau of Meteorology has quality data going back decades and this is cross-checked with private and public satellite data. The solar and wind industries are ready to deploy and know where the best resource is, but they need the government to legislate for transmission network extensions to reach it along with the only viable policy option for the job which is the Feed-in-Tariff.
Geothermal and CCS are not, as claimed by the report, natural advantages to Australia. CCS is not a natural advantage to anyone, as it has never been demonstrated anywhere post- or pre-combustion with coal fired or gas fired electricity generation, and many experts around the world agree that it never will.
Geothermal in Australia is a sub-standard form known as ‘enhanced’ geothermal. Those countries which have a natural advantage in geothermal such as New Zealand, US, Iceland etc have conventional geothermal resources. Enhanced geothermal resources such as those found in Australia are highly speculative and will likely never be proven.
For the Grattan Institute to suggest nuclear power as being viable in this country is ridiculous, to say the least. Areva the world's biggest nuclear power plant technology company, has just announced a further year of delays for its Gen III nuclear reactor in Finland.
This is on top of the fact that it is already five years late and after the project has gone $4 billion over costs and forced the exit of the world's 2nd biggest power technology company Siemens as a partner. Areva, now desperate to improve its fortunes, has bought the solar company Ausra and Wind company Multibrid. As Areva has realized, solar and wind projects on the other hand have reliable 2-5 year project timelines, guaranteed output, reliable costs and very little technical risk.
The Grattan Institute’s report fails to acknowledge that in the near term (probable within 3-4 years) solar will be competitive in the market, and in the meantime should be supported by Feed-in-Tariffs. It fails to acknowledge the commercial reality of baseload solar thermal plants that include storage. It fails to acknowledge that Feed-in-Tariffs have been the most successful policy mechanism for reducing technology costs and carbon abatement demonstrated anywhere in the world to date.
The Institute’s fascination with fossil gas (coal seam gas, shale gas and conventional gas) is consistent with the position of Tony Wood's (Grattan, Program Director Energy) former employer Origin Energy, which is set for windfall profits if it can achieve its aims to develop massive coal seam gas resources across the eastern seaboard and is consistent with lead Grattan funder BHP Billiton's business interests which include massive shale gas operations in the US and conventional oil and gas plays in Australia.
Matthew Wright is executive director of Beyond Zero Emissions.

Comments on this article
Sub optimal and expensive solutions are many, optimal are few.
I scanned the article URL provided on brave new climate. It would seem that from its critique, that it far too easy to come up with more expensive, impractical of combinations of renewable energy, badly located, the weirder , the better , and then calculate to make a conclusion that an electricity system with 100 per cent renewables are expensive, impractical and too hard.
Else why pick Parabolic trough for CST, why bother with early generation technology, when there is already proven and working power tower CST, with 2 axis heliostats systems which have cost and energy generation, storage and total system advantages? The BZE have worked hard to find and publish and optimal system solution, in which energy, time, money, engineering is optimized with best placed and available technology.
BZE have done such a good job that now any fool can find and describe more expensive ways of doing it. The challenge is to find another integrated system at least as good. Feed in tariffs have been shown to be the most successful incentive. The technology is available already, and cost curve reductions are happening, with increasing scale of production and experience, making it a far better and safer return for investors. The only long term safe bet is on renewable energy solutions. Who wants to wait around for energy impoverishment and more serious climate change first?
And ?
Would Mr Simpson please respond to the challenge as promised ?
RE: Answer -Richard Simpson are you an astroturfer?
Richard,
I am Executive Director of Beyond Zero Emissions, formerly a computer engineer, working in the finance community as well as radio and print news working with Reuters Australia, Hewlett Packard and Dow Jones to name a few, but now I am a spokesperson and business administrator for the not for profit climate and energy security think-tank Beyond Zero Emissions This is all on the public record. My organisation's work includes conributions from former and current employees of Exxon Mobil, BP, Shell, AGL, BHP, BHP Petroleum, SKM, Worleyparsons, Parsons, Governments, Regulators and others. And a direct staff group that includes Chemical Engineers (ex petrolueum and gas industry), Mech Engineers, Physicists, Environmental Engineers and a couple of others. A number of our staff have completed and are completing their Post Doctoral Thesis' in relevant fields. As for your self? Who is Richard Simpson? I'm sure readers would be keen to know. And as one person can't be an expert in all the areas that are being commented on I am advised by experts. Who is on your payroll advising you on these issues that will mean you are able to comment in these areas?
Answer
You show me yours, and I will show you mine.
RE: Expertise
Richard,
So what expertise and/or qualifcations do you have to comment in this area?
Answer
Yes
Expertise of Richard Simpson to critique
Hi Richard,
So what expertise do you have to be commenting here?
Are you an expert in any of these areas?
Matthew
Well Said
"Matthew 7:15-16
“Watch out for false prophets. They come to you in sheep’s clothing, but inwardly they are ferocious wolves.
16
By their fruit you will recognize them. Do people pick grapes from thornbushes, or figs from thistles"
Matthew 7:15-16
Just as I also have no time for those who evaluate criticisms not on their content, but on who's making them or what IP address they appear on.
How would Japan cope with zero reactors in March/April? Not with renewables, that's for sure.
RE: Not bothering responding to pro nuclear zealots
Simple thing here is that I am not going to waste my time.
54 reactors in Japan. How many are turned off? Was it 51 or 52?
How will Japan cope with zero reactors in March/April?
By their fruits you will know them.
All the ad hominem stuff is most unedifying.
Matthew, if you only respond to published criticism, why haven't you addressed Trainer, T., (2010), Can renewables etc. solve the greenhouse problem? The negative case, Energy Policy, 38, 8 August, 4107–4114?
And the trouble with French nuclear is that it produces too much energy. Right.
Oh, and don't come back with that 'renewable-powered Germany rescued nuclear-powered France' tripe you put on the ABC today (http://www.abc.net.au/environment/articles/2012/02/09/3426757.htm). As the French demand peak occurred around 7 pm, you can be sure the contribution of Germany's much-vaunted gigawatts of PV capacity was exactly zero.
Polluter
Richard,
They are well established seasoned polluters. As are the people who fund them and partake in profit making from them. They are destroying our agricultural land, risking our agricultural exports, emitting vast amounts of pollution via fugitive emissions releases and their products are very polluting when they are finally combusted at point of use.
There is already a Zero Emissions alternative and that's what we should be using now.
If you are the Richard Simpson who was thankful for SANTOS' gift to your hobby horse then you obviously will be in denial over the disgraceful polluting ways of this company.
Matt
Polluter
Why are Santos/others gas polluters, have they broken any sections of relevant legislation?
Richard which fossil fuel plants are you funding?
Hi Richard,
Is this you receiving money from SANTOS big Australian gas polluter?
The guys who just had to fess up to dumping Lead, Arsenic and Chromium at wells in NSW.
http://www.santos.com/blog/archive/2011/09/13/Kingspark.aspx
Reality
Mathew Wright,Why do you remove postings?
I have read that reply, and would consider the quality on a par with a high school student. Unless there is a more detailed response, somewhere, referenced etc.
Link please.
BZE replied to Diesendorf in CSIRO Ecos
As Diesendorf actually got published, we replied to what he had to say.
Our response is also available on the Ecos website.
http://www.ecosmagazine.com/?paper=EC10076
Richard Funny that you failed to mention we had responded to Diesendorf.
Is it that you are a mouthpiece for the dirty fossil fuel industry?
RE: Great Team at Zero Carbon Australia
Rod,
Thanks for the suggestion.
One of our main donors is a former head of Citibank Australia. He along with many other volunteers helps us in this area.
Matt
Great Team At Zero Carbon
Perhaps one accountant/economist/business person who can input financial/economic reality would be a good touch. You know someone runs a business, pays taxes and funds the philanthropy that pays for this stuff!
RE: Reality
Richard,
For readers are you the wealthy owner of an investment firm that invests in fossil fuel projects, astroturfing on energy and climate forums?
Have you received money from Santos on behalf of one of your favourite organisations?
Seems that your views are consistent with Santos' public positions and I think you should sign off on who you are and clear up this very serious issue regarding your independence and credibility.
Reality
I refer to Beyond Zero Emissions (2010) “Zero Carbon Australia – Stationary Energy Plan” (critiqued by Nicholson and Lang (2010), Diesendorf (2010), Trainer (2010) and others).
There is now another critique regarding paper “Simulations of Scenarios with 100% Renewable Electricity in the Australian National Electricity Market” by Elliston et al. (2011a)
The scenario is:
· 15.6 GW (nameplate generation capacity) of parabolic trough concentrating solar thermal (CST) plants with 15 hours thermal storage, located at six remote sites far from the major demand centres;
· 23.2 GW of wind farms at the existingNEMwind farm locations - scaled up in capacity from 1.5 GW existing in 2010;
· 14.6 GW of roof-top solar photovoltaic (PV) inBrisbane,Sydney,Canberra,MelbourneandAdelaide;
· 7.1 GW of existing hydro and pumped hydro;
· 24 GW of gas turbines running on biofuels;
· That is, the wholesale cost of electricity for the simulated system would be seven times more than now, with an abatement cost that is 13 times the starting price of the Australian carbon tax and 30 times the European carbon price. (This cost of electricity does not include costs for the existing electricity network).
http://bravenewclimate.com/2012/02/09/100-renewable-electricity-for-australia-the-cost/
RE: My Goodness
Richard,
I will take it that you just want to snipe from the sidelines without declaring your interests. Well that's just not on. Readers can choose for themselves whether to take you seriously.
Matthew
My Goodness
I think you should rethink your actions.
RE: Responding to Critiques
RIchard,
IF we responded to every blog - in this case the leading pro-nuclear "blog" in the country then we'd tie ourselves in knots and never get any work done as the opposition changes its form like the liquid terminator.
We have read the critique and where there is anything that will inform or update our work for version 2.0 we have taken it onboard.
The ZCA project is lead by the leading research university in the country. It pits itself against other works that come out of universities such as work by University of NSW. Diesendorf et al. Which mind you we do not agree with everything they conclude but at least they have put out fair and reasonable well referenced work.
If this blogged critique was published in a respectable journal then we would reply, but it is not and that is because no journal would accept that kind of work.
RE: Oh Dear - denying the Merit Order Effect #2
The grid is already there.
The cells were never paid for by the taxpayer, they were paid for by electricity consumers. You do not have to buy electricity of the grid if you do not want to.
RE: Oh Dear - denying the Merit Order Effect
PV supresses the wholesale power price and lowers costs.
You are denying the merit order effect?
Do you believe that it exists?
Assuming you are smart enough to accept that the market operates on the Merit Order Dispatch system.
The Merit Order Effect is an effect where PV as a source due to the timing of its production, reduces wholesale electricity prices significantly.
Meaning that those reductions can be greater than the cost of encouraging people to put PV on their roofs, through funding of a FiT incentive scheme.
This has nothing to do with poles and wires. We still have to pay for poles and wires and I only ever claimed that the correlation was with 85% of the high price events in the market. So this saving that PV creates is in the wholesale market.
The MoE effects existing generators who have been gaming the market for years including windfall gains from high prices as high as $12,500MWh
In most comparable markets the world over prices do not go to $12,500MWh. An extreme period in France at the moment (during this weeks cold snap) has the peak spot price up above $100 Euros and a bit less in Germany.
If we only have to run gas peakers 2% of the hours of the year (on kerosene I might add) then that's the market opportunity going forward.
And in the future that will be replaced with Solar Thermal w/storage plants or batteries such as those in Nissan's Leaf.
Responding to Critiques
Martin you are correct, I brought this up late last year quoting the same.I asked Wright to respond. My contributions were removed from the blog on several occasions. Nothing like free speech.
He will not acknowledge any criticism or questions, and will not advise as to his qualifications.
Oh Dear
PV.It is being subsidised.
The poor do not have such intallations on their roofs.
FIT is paid by all on the grid including the poor. They subsidise my installation.They pay for rises in the price.
One thing you do not seem to acknowledge.The grid still has to be there( and paid for by all) no matter how many imported cells adorn the roof. The sun goes down and it rains, even in Melbourne.
There is a capital cost of the cells paid for by the taxpayer, there is the grid which would be there anyway, and you still have to spend capital building baseload,peak and intermitent load when the sun does not shine and the wind does not blow.
If it really works, let it stand on it's own two feet.
Respnding to critiques
So Matthew you are willing to critique other peoples' research and publish an opinion piece. You notice that you have received some feedback on your critique – no doubt with more to come – and you have had the opportunity to respond to that feedback.
I was the lead author of a very detailed critique of the ZCA2020 report 18 months ago which was published on Barry Brook’s BNC blog http://bravenewclimate.com/2010/08/12/zca2020-critique/ .
You were the lead author on the ZCA2020 report but I never heard a peep from you or any of your team about my critique. If you didn’t read it then you were clearly irresponsible. If you found errors you never shared them with me or even questioned any of my assumptions. Yet you have no difficulty in heavily criticising Tony Wood’s work in a public forum.
I challenge you to write an opinion piece on my critique. I’m sure that Climate Spectator will be more than happy to publish it and I promise to respond to what ever you come up with.
RE: Updating website
Try page viii of the report about half of the team was employed at that stage and are listed.
http://media.beyondzeroemissions.org/ZCA2020_Stationary_Energy_Report_v1...
The rest have been employed since.
If you are in Melbourne, you are welcome to come down to the office in Fitzroy and meet the team, feel free to give me a call on 0421 616 733 to arrange.
The primary reason the website hasn't been updated is because you haven't donated and we have spent all the donations on our research staff.
Now that you better understand our organisation, I'm looking forward to issuing you with a tax deductible receipt and thank you for your support.
RE: Photovoltaic as Middle Class Welfare
Richard,
University of Melbourne Energy Research Institute have written a paper on the Merit Order Effect. The University of Melbourne is ranked as the most or second most respected research institution in Australia by a number of well known international rankings. (Yes I can reference this if you can't use google search)
By applying the value of the resultant Merit Order Effect to large numbers of Solar PV installations, we can see that a significant deployment (thousands of Megawatts) of Rooftop Photovoltaic can occur at a lower cost, that the resultant savings to consumers.
The Merit Order Effect occurs in the whlesale market and occurs as a result of the price dampening you get from adding the commodity. The commodity is electricity and the generation correlates with 85% of the higher and extreme prices that occur on the NEM.
IT's cheaper to have PV on the grid and to not meaning that someone who puts PV on their roof is providing a service lowering the bills for all including the poor.
Where is the middle class welfare in that?