Published on January 16th, 2018 | by Steve Hanley0
Australia Poised For Renewable Energy Breakout
January 16th, 2018 by Steve Hanley
High electricity costs make renewable energy more attractive. That’s why Bloomberg thinks Australia is poised to have a renewable energy bonanza. “The payback period for residential solar is now as low as it was in 2012, when super-generous feed-in tariffs and subsidies drove a massive boom in installations,” says Annabel Wilton, an analysts for Bloomberg New Energy Finance in Sydney.
Solar Growth In Australia
By 2040, up to 45% of Australia’s electrical power is predicted to come from “behind the meter” systems consisting of solar panels and battery storage located on private property. If that prediction comes true, Australia will lead all other countries in renewable energy production.”We will see I think a boom over the next decade in battery storage and also solar thermal, we’re starting to see that play out now in South Australia,” says Andrew Stock of Australia’s Climate Council.
Warren Hogan, an independent economist, says the forces behind the trend toward more renewable power include the highly publicized failures of the electrical grid in the southeastern part of the country last year together with the high cost of electricity brought on by higher prices for coal and natural gas. “The key is probably the price of electricity and energy in the domestic market, is elevated and has remained that way for a couple of years,” Hogan says, according to a report by MSN. “So that’s made the economics of these big capital investments more favorable and they are big initial capital outlays.”
Shifting Political Winds
The political winds have shifted in favor of renewables as well, Hogan says. “There is a strong support for traditional energy sources, such as coal and gas in the current Federal Government — but even in some parts of the government you’re seeing support when renewables come through. It’s being backed up by policy and support, particularly from state governments. It’s a big shift in the domestic energy scene.”
French company Neoen was the developer for the Tesla 100 MW battery storage project in South Australia last year. It is now considering a much larger storage project capable of supplying the energy needs of 57,000 homes in Queensland near its Kaban Green Power Hub southwest of Cairns. Garth Heron, Neoen’s head of wind development for Australia, tells Bloomberg that Queensland has “a lot of need for electricity storage.”
The project with Tesla “opened up [Neoen’s] thinking with respect to large-scale storage,” he says, according to a report by Forbes. Although Tesla has not yet become involved in the Queensland project, the fact that it worked well with Neoen in South Australia suggests both companies would be willing to work together again if the opportunity arises.
The Largest Solar Power Plant In Australia
The Sydney Morning Herald reports this week that the University of New South Wales has signed a 15-year power purchase agreement with Maoneng Australia, whose Sunraysia solar power plant near Balranald will provide 530,000 MWh of electricity annually — more than any other solar installation in the country. The university has contracted to buy about a quarter of that supply — 124,000 MWh — which is enough to meet virtually all of its electrical energy needs. “We are seeing a strong trend amongst corporate energy users turning to PPAs as a way to hedge against future pricing movements and to meet their green energy objectives,” says a spokesperson for Australia’s Energy Action. People in Australia use words like “amongst” and “whilst” frequently.
“Over the past six months, UNSW has collaborated with our contract partners Maoneng and Origin to develop a Solar PPA model that leads the way in renewable energy procurement and reflects our commitment to global impact outlined in our 2025 strategy,” says Ian Jacobs, vice chancellor for the university. The PPA will be a major part of its commitment to become energy carbon neutral by 2020.
“This agreement reflects the thought leadership coming from UNSW on climate change,” Jacobs told Fairfax says. “It’s a highly competitive agreement financially [that will] allow UNSW to secure carbon emission free electricity supplies at a cost which is economically and environmentally attractive when compared to fossil fuel-sourced supplies.”
Business Is Business
There are plenty of politicians around the world who are in thrall to fossil fuel companies. But business is business, so they say, and nothing gets the attention of business people like the opportunity to slash costs. The trend toward renewables in Australia proves once again that if the people will lead, their leaders will follow — eventually.