We should be thinking big on solar
Australia is blessed with the best solar resources of any developed country, yet the nation has been a laggard when it comes to harnessing the sun’s energy to produce electricity. The government’s recently announced carbon price policy includes the creation of new clean energy agencies – the Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC). Those interested in climate and energy policy are now investigating the likely impact of these new bodies.
Solar power will play a central role in the nation’s energy future. However, its short- to medium-term prospects depend on government policy. The nature of the carbon price mechanism that Prime Minister Julia Gillard has announced will benefit the cheapest ‘low-carbon’ energy sources namely fossil gas – in the short term. It is not designed to bring renewable energy technologies (that are currently more expensive than fossil fuels) rapidly down the cost curve to out-compete cheap and dirty energy sources.
By including clean energy measures in its carbon price package, the Labor government has acknowledged that price signals alone will not drive the rollout of renewables.
The main advantage of the proposed Australian Renewable Energy Agency (ARENA) is that it will administer existing renewable energy support programs at an arms length from government. Given the sub-optimum Solar Flagship choices, this is undoubtedly a smart move. The downside is that ARENA is presiding over funding that is already allocated. While the remaining funds will build a few more demonstration plants, they won’t create the pipeline of projects needed to rapidly build a domestic solar thermal industry.
Clean Energy Finance Corporation (CEFC) is the government’s version of a green bank. Its mission is to support renewable energy technologies that are close to commercialisation. The CEFC is going to be run with one eye on profitability and looks like it will predominantly use low-interest loans to get projects off the ground. It appears unlikely that the most promising solar-thermal technology will benefit from this model, although wind projects (that already benefit from the LRET) stand to gain from low-interest loans, as wind is currently the most economically viable renewable energy.
The main flaw with the CEFC is the fact that half of its endowment – $5 billion – is available for 'low-emissions’ technologies. This means hybrid solar/gas plants, trigeneration, controversial coal-to-gas technology, and possibly even ‘bolt-on’ renewables for existing fossil plants, could be eligible for loans. It is unacceptable to invest scarce investment dollars in such projects when our atmosphere is already overloaded with carbon. If the government wants to credibly sell its policy as a plan for a ‘clean energy future’ then it will have to strip out measures that support pollution.
Last month, Spain unveiled the Torresol Gemasolar power tower plant near Seville – precisely the type of project Australia should be rolling out. Gemasolar’s key innovation is the use of molten salt energy storage that will allow 24-hour electricity generation and a generating capacity factor three-times greater than the government-picked Solar Dawn project in Chinchilla. The first CST plants to be built will be expensive, but with follow-up plants in the pipeline to drive economies of scale, the technology can ride the cost curve to compete with fossil electricity.
A targeted deployment policy for the large-scale rollout of Germasolar-style power towers is the missing piece of the climate/energy puzzle.
Well-designed feed-in tariffs in Spain are rapidly increasing the amount of solar thermal generating capacity. CST now feeds over 1000MW of renewable electricity to the Spanish grid. Spain’s FiTs have encouraged billions of Euros worth of private investment that will see 2500MW installed by 2013. The Spanish Solar Thermal Industry Association expects the total installed capacity to exceed 10,000MW by 2020 – a similar amount of the world’s total geothermal electricity generating capacity but installed in under one fifth of the time it took the geothermal industry. To put this into context, Spain’s projected 2020 CST capacity would be enough to provide one fifth of Australia’s current electricity needs.
Solar is ready to play a major role in Australia’s electricity sector. It’s time for the Gillard government to develop a policy for CST deployment to support the newly formed Australian Renewable Energy Agency and Clean Energy Finance Corporation. To achieve this end, it will be difficult for the government to ignore the successes of well-designed and targeted feed-in tariffs. Some 80 per cent of the world’s new non-hydro renewable energy capacity has been installed through the application of comprehensive renewable energy legislation based around the feed-in tariff mechanism.
The Labor government can secure our climate and energy future with an aggressive rollout of concentrating solar thermal (CST). For that to happen we need political will, not political will not.
Matthew Wright is executive director of climate and energy security think tank Beyond Zero Emissions
Comments on this article
Incentives 4 Renewables - CEFC loans or Feed-in-Tarif fine by us
Just to correct a belief out there that we are backing one particular financing method over another.
This is incorrect, we are happy with serious mechanisms that work and get serious parallel and serial deployments of Solar Thermal, Wind and Photovoltaic.
We are also pro commercialisation, and academic private and public research money being made available to support getting promising technologies over the line like carnegie wave power and the Wizard Dish system.
RE: How much carbon emissions has Spain's projects avoided
Jek,
Thanks for your question. Wind Power which has been incentivised now for 10 years has reached 18% of the nation's annual electricity and the country is heading towards its target of 35% of the nation's electricity from Wind by 2020.
Solar PV and Solar Thermal combined are now nudging 4% of Spain's annual energy this should rise again next year.
Wind in Spain in 2011 will avoid 25Million Tonnes of CO2 or the equivalent of half of the emissions from the Latrobe Valley. (15 million spanish homes equivalent)
Solar (photovoltaic and Thermal) will avoid 5.6Million Tonnes of CO2 in 2011. This is expected to grow very quickly now that the cost of Solar Photovoltaic has come significantly down the cost curve and will cost grid parity in Spain by 2015. (Grid parity is when it's cheaper to avoid buying power from the meter and supply it yourself - it is usually matched with a net based feed-in-tariff where you get the same price you would buy electricity in at.
So the savings are significant. Hopefully Australia will ready itself to achieve the same.
Clean Energy
@Gregory Olsen, Yes i totally agree. Australia can stop from being addicted to fossil fuel. I already have solar hot water before but i am preparing myself for solar panel as well. Hopefully Renewablelogic will get them installed next week.
How much carbon emission have Spain's projects avoided?
Quoting the nameplate capacity of these projects is of limited use.
Surely the metric of interest is how much fossil-fuel generation capacity has been decommissioned or avoided due to the deployment of these projects. Does anyone know?
I suspect it would be a fraction of the nameplate capacity.
I fear it would be zero, or close to it, but I'd love it if someone had evidence to the contrary.
How much carbon emission have Spain's projects avoided?
<sorry - duplicate posting removed>
I feel a horrendous cost coming on...
The "most promising" solar thermal technologies will not benefit from low interest loans.
So how much money do we have to plow in to deploy the "most promising" technologies on a reasonable scale?
At that cost, what other options are there to achieve the equivalent carbon reduction?
I don't want a gold-plated low-carbon solution, I want one that works.
What Nonsense
Here are the FACTS
http://bravenewclimate.com/2010/08/12/zca2020-critique/
I'm Behind BZE 100%
Great work, Matthew. Bring it on Australia!! Let's get off our fossil fuel addiction and free ourselves from it's bondage. Energy security awaits a bold Australia!
Gas benefits now from huge subsidies
We need to cut greenhouse gasses from the atmosphere and move to zero emissions energy now in order to achieve a safe climate. How can gas achieve this when it only cuts emissions by say 40% from bau and continues to pump more carbon into the atmosphere. When you look at likely unintended methane emissions from coal seam gas, let alone the destruction of farming and water assets, the overall greenhouse impact might not be any better than bau. Gas is a fossil fuel, it's been subsidised for long enough, time to give clean energy a hand up. Of course it will be more expensive initially, especially against entrenched fossil fuels that have aquired dirt cheap credits from poorly set up mechanisms and existing subsidies.
Nice article Comrade Matt. Tony Abbott would be pleased.
This article fundamentally advocates a direct action strategy over a market-based mechanism. To advocate for "the Gillard government to develop a policy for CST deployment" is essentially asking the government to be a technology picker.
Garnaut and most prominent economists agree that market based mechanisms will deliver the carbon abatement targets at least cost, and will yield further innovation than could be achieved through a government-mandated direct action policy.
The BZE work is a great demonstration of technical feasibility, and It would be great to see more CST in Australia, but not through government mandates that lock-in a specific technology before the price signal even has a chance to do its work.
Thoughts on solar heating and cooling
First, solar hot water and possibly water heatbank for winter heating. The practicality should not be difficult or costly. Of course there is the Australian costing to consider. Last year in Philippines I costed a Chinese made hot water system $A 750 ( albeit without electric booster ) On internet, similar unit, most likely made in China, from SA company $5,000. For those old enough, recall the Silent Knight kerosene or gas refrigerators. Surely the same technology could be adapted, using solar heat to provide air conditioning. The refrigerant used was amonia, thermally circulated. the only electric power neede being for a fan. Think solar panel.
SHM/the Age costs
@ vasso massonic
Can you point me to the actual Productivity Commission paper with the extreme wind and solar numbers quoted in the SMH/Age?
They look remarkably like they should have a decimal palce in there - Wind $150.2 and solar $400.4 /MWh (though they still look high)
@ Peter Winch Gas might work
@ Peter Winch
Gas might work for you Peter, but it's not going to work for a safe climate which doesn't care about politics incidentally. If we get this coal seam gas crime against nature started up in Australia in a big way we're looking at source of extraction emissions of methane rivalling if not surpassing coal in terms of damaging green house gas per KWHr of electricity produced.
If you want to contest BZE's "post-graduate thesis" then you'll need to put up more than your sniping-from-the-sidelines as a substitute for research that says they are wrong.
Dinosaurs who control the purse—in hands of fossil-fuels ind'ry
@ Martin Nicholson
I think that's the point of Matt's article and his continued campaigning on this issue. Lend a hand why don't you, support BZE!
business built on government regulations.
Business built on Government duties, tarriffs, regulations, import quotas etc need to think back a bit before they invest in conditions that can change overnight.
A bright spark, if we can afford the luxury
The Productivity Commission have rated electricity generation: coal power $79, gas $97 wind $1502 and solar $4004 per megawatt hour.
The Pricing and Regulatory Tribunal announced electricity prices will rise in NSW by an average 17.3 per cent from July 1. That's before we even think solar.
PC and Treasury are dinosaurs
It's no surprise the Productivity Commission and the Treasury only have 5% of electricity to come from solar by 2050. They also think oil prices are going to go down and they don't take into account the climate science and crisis we are facing.
These organisations are dinosaurs, with no grasp on reality. The article above is spot on, we should be supporting large scale baseload solar roll-outs. We need to convince the public that that is the way to go and that will convince the government.
Right now the big polluters are the ones calling the shots - no wonder we've got such idiotic policy makers and bureaucrats.
Risk analysis
And what about the credible risk analysis on business as usual? Soaring oil prices, building soon-to-be out-of-date infrastructure, etc.
You're on the money Matthew
We don't need Spanish technology to develop solar thermal. We've got the money and the expertise in Australia to go solar in a big way. Yet we're still pussyfooting around with fossil fuels.
Solar to play a central role?
Matthew this is clearly not the opinion of Treasury or the Productivity Commission. Even out to 2050, Treasury is only expecting 5% of electricity to come from all forms of solar (both PV and thermal). Hardly a big vote of confidence for your plan.
If you want to see greater financial support for solar now you will have to change the minds of those in Treasury who set the future paths. If you can convince them that your Zero Carbon plans can really work you might have a chance of putting it to the test.
We should be thinking small on solar!
Matthew,
A proven solar thermal technology is right under our noses: domestic solar hot water! Probably doesn't make for good photo opportunities but it ticks a few other boxes. Cheaper than fossil fuel water, tried and true technology, tackles one of the biggest domestic energy users. But in spite of government incentives they are still a rare sight in many of our cities. Once every house has a solar hot water heater then we can move on to other things.
We know why the Spanish companies are here.
Spain is going broke and Australia is seen as the next plump goose. Why anyone thinks Spain is an economic role model for anything including how to cost effectively meet energy needs beats me.
Solar is ready alright...for a big feed. Not once, ever, anywhere has there been any credicble analysis of renewable energy in Australia. I said credible, so that rules out Matthew Wrights BeyondZero project work. Its nice post-graduate engineering research, but too slim on socio-economics, risk analysis, just to name a couple. (That is system wide risk analyisas well as financial and economic risks - not just insurability against hail stones).
At the moment it feels like living in Bizzaro world, where the technophobes are now the technophiles those with no answers have all the answers. Its certainly weird. And all the while running over the top of what will work..gas.