Cap And Trade

Published on May 30th, 2013 | by Silvio Marcacci


Australia Approaches 22% Renewables By 2020, 51% by 2050

May 30th, 2013 by  

Australia may be one of the most coal-dependent economies in the world, but by the end of this decade, it may have one of the greenest global grids.

A new analysis of government data compiled by Green Energy Markets finds Australia on track to not only hit 22% renewables by 2020, but reach an unprecedented 51% of all electricity by 2050.

Two major factors are empowering this paradigm shift: rapid growth of solar energy and the gradual phase-out of oil and brown coal – the two most carbon-intense energy resources.

Where’d All This Green Power Come From?

Since past is prologue, let’s examine how this green transformation began. Australia’s 20% Renewable Energy Target (RET), roughly 60,000 gigawatt-hours (GWh) of power, or equal to reducing every resident’s carbon footprint by one-third, was established in the Australian Labor Party’s 2007 election platform.

45,000GWh of new capacity was required to meet this target, considering the country’s projected 2020 electricity generation requirement of 300,000GWh and existing renewables capacity of 15,000GWh as of 1997.

Electricity retailers and other large-scale emitters are required to produce certificates demonstrating progress against a set liability level of renewable generation. In January 2011, the RET was divided into two parts: an uncapped scheme for small-scale renewable projects like rooftop solar, and a utility-scale target of 41,000GWh.

Slow Start, Fast Finish

So far, progress toward the RET has been modest, despite billions of pending clean energy investments. Government figures show that in 2012-2013, 13% (34,000GWh) of the country’s total electricity came from renewable generation, with 60% coming from coal, 24% coming from natural gas, and 2% from oil.

But renewables are poised to quickly expand, growing at an annual average rate of 4.8% from 2012-2013 to 2049-2050 while fossil fuels decrease at an annual average rate of 3.1% over the same time period. As expected, this means the fossil fuel industry has renewables in their sights.

Under this projection, total renewable generation will hit 194 terawatt hours (TWh) for a 51% market share by 2049-2050. Wind power will represent the largest percentage of total renewables at 21TWh and a 4.7% annual growth rate, while solar will be the fastest grower at 12.3% per year to reach 16TWh. This isn’t surprising, considering solar reached “socket parity” in Australia several years ago.

Solar Energy On Top Down Under

Even though transmission is boosting wind’s market access and investment is pouring into Australia, helping to build the Southern Hemisphere’s largest wind farm, solar energy could lead the country’s transition to a clean energy economy.

Electricity consumption in the National Electricity Market fell 5.5% (11,400 GWh) from 2008 to 2012, with more than half of this reduction attributable to solar and energy efficiency activities supported by Government market based schemes.

Distributed generation from rooftop solar PV and solar water heater systems are considered by the government as reductions in demand. Good thing, as one million Australian homes now have rooftop solar.

The average capacity of an Australian rooftop solar system is now between 3-5 kilowatts and they will continue to lower grid consumption past 2020, producing “up front” renewable certificates and helping lower the cost of solar PV components, showing the two-way benefits of small-scale solar.

Australian Renewables May Even Surge Past 51%

While extremely promising, this renewables outlook may not even capture the true potential of Australia’s clean energy future. Government figures include “off-grid” electricity generation in the mining industry, a sector expected to grow faster than generation on the main grids. But since this generation is difficult to determine, government estimates may be lower than eventual output.

In addition, Green Energy Market’s analysis doesn’t include community solar projections or growing investor concerns about Australia’s risk from the $6 trillion carbon bubble.

But most of all, the analysis doesn’t consider Australia’s nascent carbon market, which has already linked with New Zealand and the European Union, and is considering linkages to China and South Korea’s markets once they are fully functioning between 2015-2020. If this Pan-Asian carbon market were to take shape, carbon prices would rise and boost demand for renewables as cross-border investment pours into clean energy sources.

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About the Author

Silvio is Principal at Marcacci Communications, a full-service clean energy and climate policy public relations company based in Oakland, CA.

  • Matt

    Yes there are those in the Auz government that want to reduce electric demand, and those that want to charge you if you use less than last year. Adding PV to your house reduces your demand. And worse during sunny mid-day if you “over” produce you reduce the demand of your neighbor. This hurts the ROI on coal plants and power plants, so you are costing others money. So Mark is “right” it does cost others money.

    • Ross

      “And worse during sunny mid-day if you “over” produce you reduce the demand of your neighbor.”

      How does one over producing clean solar energy reduce the demand of his neighbour? Isn’t the grid taking in that solar power and selling it to the neighbour?

      • Bob_Wallace

        Your overproduction supplies some/all of your neighbor’s demand and reduces overall demand on the grid.

        In fact most solar systems, if they are sized to produce as much electricity as the building uses in a year, would wipe out the demand of about four neighbors.

        The grid is taking in the production and selling it on. But the grid is not producing that electricity.

        • Ross

          But isn’t the grid operator getting the revenue from selling on the power from the PV equipped customer to the customer that can’t or doesn’t yet have PV? So it shouldn’t matter where the power came from.

          • Bob_Wallace

            Sure. In a net metering situation the grid operator is buying electricity from rooftops and selling it into the expensive part of the day and then paying for it during the cheaper part of the day.

            As long as peak demand matches sunny hours this is a good deal for the grid operator. But when rooftop solar destroys peak demand as has been happening in Germany then things get messy.

            Plus, utility companies often have significant investment in coal and nuclear plants. And profits for those investments are disappearing. Some coal and nuclear plants are failing, financially. That’s also messing up the normal pricing models. Who’s to pay for stranded assets?

          • Ross

            Sounds like they need to separate their distribution grid operators from the power producers and set a fair price for the use of the grid.

          • Bob_Wallace

            There are two plant ownership models.

            Some, “merchant”, plants are owned by companies that don’t operate grids. Those companies will eat the loss and some may go bankrupt. Earlier this month we saw Dominion close down a nuclear plant they owned in Wisconsin because it was losing money and no one was interested in buying it.

            Some companies abandoned plans for new nuclear plants starting a few years back and started moving into wind and solar.

            Other coal and nuclear plants are owned by the same company that runs the grid. A coal or nuclear plant that ceases to be productive is a cost to the grid operator. They are going to try to recover that loss if they can.

            There’s no one controlling what is happening. The fossil fuel and nuclear industries have insisted that renewables would not amount to anything. They were wrong and rather than utility companies starting to adapt in time they’ve waited until they are getting hurt. The incredibly fast drop in solar costs is something that has surprised all.

            I don’t have an answer. I just think it’s going to be messy for a while. Fossil fuel and nuclear industries have considerable political power. Wind and solar are just starting to develop some.

      • Matt

        I was being sarcastic, if your PV produces more than you need, then it goes out on the wire and into the house next to you. So from the power plants stand point you “reduced” their demand also. Yes the grid operator still charges them for the power. But your streets demand is decreased by the total amount you produce even if you don’t use it all.

  • Arndt Ritter

    Polls tip a conservative landslide in September and they’ve vowed to undo all the work of the current government in this field, most notable the removal of the carbon tax. Check back in 2 years to see the effects on renewable growth. Though solar is now cheap enough that it makes sense for home-owners to continue plowing ahead with residential solar installations.

    • mds

      With installed residential solar less than half the end-of-grid price of electricity in Australia I don’t see how the conservatives will put the solar genie back in the bottle. …and solar prices are still falling…
      It’s done in Australia. Renewable will not be 50% in 2050, they will be much more, particularly solar. Highest use of electricity for AC in Australia and availability of solar then, plus diurnal regularity, means solar will figure large in the future there.
      With several different low-cost storage technologies coming to the market, maybe Australian residents don’t need their grid.
      It will be interesting to see.

      • Arndt Ritter

        I agree with what you say, except to say that goverment policy seems to have an effect on utility scale generation and that the removal of carbon pricing and the continuing direct subsidisation of coal generators will slow the adoption of utility scale generators. Of course, as you say, renewables in Australia are inevitable because of the vast potential and the gorwing market forces in spite of government policy.

  • question

    This analysis strikes me as almost entirely worthless… Their projection is for almost 40 years into the future when the level of solar and storage technology is essentially unknowable. And yet they predict a growth rate of only 12.3% when the current growth rate is far higher. Granted the FITs had a lot to do with the recent boom, but with prices so low and continuing to decrease I find it difficult to believe that solar will produce less than wind in 2050.

    • Bob_Wallace

      I agree that attempting to predict that far out makes little sense.

      I’m not sure that solar will ever produce more of our electricity than will wind. Both are likely to reach about the same price point.

      It’s going to be cheapest to use electricity direct from the source rather than to store it. Since the wind blows more hours per year than the Sun shines we’re likely to use more wind.

      • question

        True, but solar is much much easier to install. No moving parts, no need for large structures, module size much smaller and hence appropriate for ubiquitous installation.

        And if one is going to have to install storage anyway (since while wind blows more frequently it doesn’t blow all the time) then I don’t see the wind advantage (once storage becomes cheap (which it will since eventually it will be just another solid state manufacturing problem).

        In any event, I think wind has a very important role to play as a complement to solar and has been the ground breaker for renewables. My real point, as you agreed, is that 40 year projections are silly in economics and technology. And also that 12% seems anemic when we are at the cusp of of dramatic change. Payback times for solar in australia are ridiculously low.

      • Martin

        I don’t understand what you are talking about, you said solar power lowers loading. How does that work reduces reliance’s given solar powered houses are on the same network as those that have reduce carbon foot print (without solar power) to the same level or if not less than solar home. Solar power houses have installed big AC which cause loading in excess of the power they generate. Could you give a link on this, how solar power house left or removed coal, on or off conveyor belt from the coal pits which is use to constantly backing up energy solar powered houses, based on carbon dioxide emission intensive.
        With electric cars you cannot displace the required energy to move that car electric motor just with solar panels it will not work.

        • Bob_Wallace

          Martin, that’s so poorly written that I have difficulty understanding what you are asking.

          • Martin

            Yes that would be your excuse known what you said was a load of rubbish.
            You couldn’t even provide a link to back your lies up.
            1 solar power removes coal from the ground.
            2 solar powers is carbon dioxide intensive
            3 solar power loads supply
            4 solar power make others pay
            5 non solar house are more environmentally friendly than solar users.
            6 solar power needs to make money out of others
            7 solar power needs government grants
            8 solar power increases power cost up (not down) (stop lying).
            9 solar power has not reduces carbon emission
            10 solar power didn’t lower the world’s carbon dioxide emissions.

            I Challenge all your claims.

          • Bob_Wallace

            1. Wrong. We now have enough solar on the grid that we are producing more electricity from solar than we are using to manufacture panels.

            2. Wrong. Solar, wind and nuclear have significantly lower lifetime carbon footprints than fossil fuels.

            3. Wrong.

            4, 5, 6, 7, 8, 9, and 10 – all wrong.

            These are claims you made. It is up to you to prove your statements. It is not my job to do your work for you.

          • Martin

            Why you need solar power if you have Nuclear power as you say low carbon foot print. (But big radiation footprint) Solar power will never run the city of New York or the US. Nuclear power is much cheap to run base load 24/7, provide low cost affordable power to the US. Just like Germany is buying power from France and other nations. Why don’t you place order to France for new state of the ark Nuclear power generators now.

          • Bob_Wallace

            No one suggests that solar power will run New York or any other large grid. However it is quite clear that a combination of wind, solar, hydro and other renewables along with storage can run our grids 24/365.

            Click on the “100% Renewable” link on the right hand side of the page and read up.

            Nuclear power is not cheaper. One cannot use prices from paid off reactors to establish prices of reactors yet to be built. The cheapest estimates for new nuclear run $0.12/kWh. Wind and solar are already cheaper than that. we can store off-peak wind for about that price.

            Germany is net seller of electricity. They sell more than they purchase. And they sell for a higher price per kWh than they pay to buy power back.

            In 2012 Germany exported 66.6 TWh of electricity, earning 3.7 billion euros or 5.6 cents/kWh.

            In 2012 Germany imported 43.8 TWh of electricity, paying 2.3 billion euros or 5.25 cents/kWh.


            Beginning in 2008 Germany began exporting significantly more electricity than they imported. In 2009 through 2011 Germany exported about 32% more electricity than they imported. In 2012 they exported 77% more than they imported.

            In 2012 Germany sold 63% more electricity to France than they bought from France.

            France is having to import power when heat waves happen. They are having to shut down reactors because they can’t cool them down. France has started investing serious money into solar and offshore wind and plans on reducing the number of reactors it operates.

  • Mark W

    It’s all well and good, but the fact of reality solar power is adding to the cost of electricity in Australia Queensland government has revealed, grid connected solar powered homes are adding 19% to other people’s home power bills those without solar power are forced to pick up this costing, therefore the Queensland government is acting on this matter.

    It’s quite clear that grid connected solar power as not reduce the cost, but added to infrastructure costing, therefore come a time where the government will have to imply a new fixed taxes on grid connected solar homes, whether it be carbon loading, a new tax or solidarity tax, we will know very shortly in the coming days.

    • Bob_Wallace

      Give me a link to the Queensland government announcement that solar has increased the price of electricity that much Mark.

      I’ve seen nothing that supports your claim.

      More demand, largely from air conditioners, is what is requiring more infrastructure. It makes no sense that adding solar on rooftops, which lowers demand, would require more infrastructure.

      We’ve been through this before and you’ve failed to support your claim.

      • Mark W

        I thought you stop talking anymore, remember Bob? You said solar power drives the cost down, here in Queensland, the Minister said the opposite. I’m more than happy to oblige request.

        However I never got any feedback from you on the related article I sent you last week in the Australian newspaper national affair “solar price rise to end power divide”

        No, no dishonesty here Bob, not with you on the job, only reporting the facts, I have inside information that there is a lot worse to come. I’m still tipping the carbon loading; solidarity tax will have to come in sooner than we think.

        how many links would you like?, I provide one for now.

        • Bob_Wallace

          OK, so now you have proved that you are dishonest. We’ve got that out of the way.

          The link you used in an attempt to support your falsehood is McArdle’s claim that subsidies are going to rise in 2015-16 when that is simply purposed legislation, not something passed.

          Your “grid connected solar powered homes are adding 19% to other people’s home power bills those without solar power are forced to pick up this costing” is simply a lie.

          • Mark W

            You may be referring to your self for been dishonest, the fact are right that grid solar power is forcing the price of electricity up wards, I think you just don’t like Australian media reports.

            Your claims of grid solar power lowering the cost for every one are simply not true.

            Your claims of grid solar power lowering the loading on the network are simply also not true.

            Provide the links Bob, your claims remain unsubstantiated.

          • Bob_Wallace

            You’ve been given the links Mark. Even the link to the Australian media pieces shows that you are making incorrect claims.

            It’s time for you to drop this line of bull.

          • Mark W

            I say again, provide me with a power bill that supports your claim, that grid solar power reduces the cost of those without solar power. Stop beating around the bush Bob.

            You have not provided a credible link. Otherwise you’re falsifying these matters.

          • Bob_Wallace

            Take a little break, Mark. Review the information given you and see if you can clear up your thinking.

          • Ben

            @bob, What do you say about this, grid solar power is to blame.

            Newman wants power blame on greens


          • Bob_Wallace

            I don’t know anything about Campbell Newman. He could be like some of our politicians who are willing to lie for the fossil fuel industry. He could a basically honest person who is misinformed.

            Here’s some bits from your link…

            ” ‘mind-blowing, excessive’ $268 increase”

            “costly state-based solar feed-in tariff”

            “He says the 190,000 homes that have solar panels are getting a ‘far too lucrative deal’ when paid for surplus energy they export to the grid.”

            The Energy Supply Association of Australia (ESSA) is the peak industry body representing the stationary energy sector in Australia – an industry with more than $120 billion in generation, transmission and distribution assets. ESSA members include government owned corporations and private companies who retail, generate or supply electricity and natural gas to consumers in Australia.

            The ESSA is the traditional electricity industry mouthpiece.

            The ESAA estimated the current total of “avoided” costs for solar at $340 million. Around $30 per household of the cost increase is due to the solar subsidy.

            The ESAA estimates that increased use of air conditioning is costing customers $330 per household per year. Eleven times more than what the solar subsidy is costing. $27.50 per month for AC, $2.50 for solar.

            People adding AC are increasing load on the grid and make it necessary to increase grid carrying capacity.

            Obviously if there wasn’t rooftop solar on the grid then the grid would have to be strengthened even more and the cost to customers would be even higher.

            So, the solar subsidy is costing people who don’t own solar little to nothing. It might even be saving them money. And it is cutting down the amount of CO2 that is released which will help slow global warming and help hold down the increase in AC electricity usage.

            Then, the utility companies, are they being hurt? The utility companies are taking electricity from solar owners and selling it on to other customers for four to five times what they pay for it.

            People should take a good look at Newman. Take it from our experience with George Bush, having a leader who is ignorant and willing to lie can create a world of trouble.

          • George

            Bob in your own dilemma not knowing the true circumstances within Australia, going as far to say grid solar power cost those without solar “little to nothing,” Obviously Mark W was right Bob and you couldn’t bear what he said was true.

            Even before the media reports were released, Mark informed you before time, no doubt knows what he’s talking about.

            Obviously you don’t.

          • Bob_Wallace

            Mark had a history here of posting things which were not true. And when the facts were pointed out to him he persisted in posting those incorrect statements.

          • George

            Sound like he was right, given solar power did cost others. What he stated sound like its going to happen, extra charges applied on grid solar power?

            Dose Mark have solar power?

          • Bob_Wallace

            Mark stated that he was off the grid and using solar.

            As far as I can tell Mark was right about nothing.

            Solar does contribute a small amount to the cost of grid power in Australia. Approximately $32 per year, $0.09 per day.

            At the same time solar reduces the cost of power because it displaces more expensive peaking power. This amount is not reflected in the $32 per year.

            We’ve seen that in Germany putting even a modest amount of solar on the grid creates very significant decreases in the wholesale price of electricity.

            Before one can say that solar is costing non-solar owners they must also account for the amount that solar is saving those same people.

      • Kenny

        @bob, ORIGIN Energy said Renewable energy costs now accounted for 14 per cent of electricity bills on there network, Bigger users of power, it accounted for 30 per cent of their bills.

        • Bob_Wallace

          Did they explain how solar could have increased their costs? If you think about it, it makes no sense except for some sort of add-on fee that the government might have created.

          Adding cheap supply from rooftops during highest demand hours is a cost saver for utilities.

          I suspect they may be trying to include some of their ‘stranded asset’ costs. Solar didn’t cause them to build too many coal plants, that was their fault, they should have seen change coming.

          Give this a read…

          • Kathyrn

            My electric bill gone up, I don’t have renewable, it’s reported on QLD ABC Radio bills will increase over 91 percent on the daily charges, power usage will go up to 22.5 percent by payments to rooftop solar. My power bill first quarter 90 day came in at 2500 dollars, added on top new charges of 616.5 dollars plus GST 61.65 bring it to 678.15 total new charges is 3178.15 dollar. Electric bills come down due to renewable don’t stack up, pure madness posting.

          • Bob_Wallace

            Kathyrn – the best I’ve been able to discover is that your electricity costs are going up because more and more people are adding air conditioning. That is increasing demand and load on the grid. Improving the grid to deliver power to people’s new air conditioning is causing most of increase in your power bill.

            The amount you pay for solar supplements is tiny.

            If people weren’t adding solar then the utilities would have to spend even more money to improve the grid because demand would be even higher.

            You need to understand that the coal industry is in trouble and they are panicking. They are seeing their profits being eroded by solar and wind coming on your grid.

            I wonder who is spreading the misinformation about how solar is to blame for rising electricity prices? You got a guess?

    • Bob_Wallace

      Looks like you’re either being dishonest, Mark, or have allowed yourself to be taken in by the dishonesty of Queensland’s Minister for Energy and Water Supply, the Honourable Mark McArdle.

      Solar in Queesland has added $67 per year for the average customer which is actually 3.5% of the average bill of $1900. Then, after one takes into account the amount of avoided costs by having solar reduce the load on the grid even that $2/week goes away.

      • Mark W

        No your wrong again bob, there is an economical crisis on Australian electricity grid because of renewable energy especially grid connected solar power. There is no evidence which supports your claim that grid solar power reduces the cost of electricity, nor does it reduce loading, contrary to your claim, the government has to increase the price of electricity because of grid connected solar power.

        The homes and businesses are struggling financially to pay power bills, now if your claims were credible, why are households going without food to pay electricity bills? We would have seen a reduction cost in electricity for homes and businesses?

        Not one home & business owners with out grid solar power as made this claim of yours, that their electricity price came down as a result of solar power been on the grid.

        Now someone is been misleading you with information the government sources are credible. More of this disaster is unravelling the by the day. The audio availability government broadcaster on the world today.

    • Ronald Brak

      Mark W. what do you think the FIT is for new solar in Queensland? For bonus points tell us what you think the average wholesale price of electricity is during the day.

      • Mark W

        Ronald. I thought you still working on your maths problem on grid connected solar power?

        Here is the Commonwealth green scheme add 18.9% to the average power bill, and I don’t see the price coming down here Ronald.
        As I explained to you before, the governments are acting as there is a financial crisis on the electrical network, because of grid connected solar power added a new 19%, it’s an economical disaster, these subsidies are adding over 20% to the power bill. That this does not account for the FIT payments, as that is a bigger percentage to be added on

        • Ronald Brak

          I take it that’s a no then. The feed-in tariff for new solar in Queensland is generally 8 cents a kilowatt-hour, although some people are able to get an additional retailer contribution. I trust this information allays your concern over solar energy increasing electricity prices.

          • Mark W

            Is quite clear that grid solar power is driving the cost of electricity up, no matter what you say it will not bring the price down. You must be the only one in denial that believes in power prices coming down.

            Treasurer Tim Nicholls and Energy Minister Mark McArdle joint statement blaming solar bonus scheme, solar REC & commonwealth green schemes for the higher cost of electricity to consumers.

          • Ronald Brak

            Mark W, do you think that Canberra is the capital of Australia?

      • Amanda

        See right through you, self-justification for payments, it’s not about climate change is not about reducing CO2 levels. It’s about the FIT payments; otherwise you would not have done it.
        All around the world it was geared up to make money, you invest money in a car and don’t expect the return from it, so why is it different from grid solar, human greed at its worst.

    • Larrabee

      Solar power is grate spend few dollars to install 200 panels @ 300w generating money like no ending, government forked out more than 60% system generating third income over $210 on avg day $1470 wk on house size 3rd of an acre. Ducted air-conditioning, no worries payments cover all expenses, trying to get approval for 200 more panels and make a few more bucks for over seas holidays, tried to max solar income to 152,000 year on the Queensland network opting to maximise profit. No tax on solar power Mark W.

    • Lisa

      Good points Mark.

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