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South Australia - Basket Case or Renewable Energy Star?

Kim Brebach - Wednesday, September 30, 2015

Australia's Southern Renewable Energy Star | Technoledge

Ever wondered how the Australian states compare on renewable energy - or how Australia compares with other countries? Forget the rubbery figures that politicians ply, here are the facts - and they may surprise you. 

'Cheaper than free'

In April 2015, Germany produced more than half of its electricity from renewable sources like solar, wind and biomass. ‘There was so much [electricity] that the price actually fell to zero,’ the Sydney Morning Herald reported. ‘And the price kept falling. It went negative. There were times on April 17 when wholesale electricity in Germany was selling for minus 14.91 euros for a megawatt hour. So it wasn't free – it was cheaper than free.’

The Herald also reported that, one day in July 2014, Queensland’s rooftop solar systems fed so much power back into the electricity grid, that wholesale electricity prices hit minus $100 per megawatt hour.

Back to the past 

So, how did our federal government respond to these events? Then Prime Minister Tony Abbott and Treasurer Joe Hockey terminated government initiatives for renewable energy industries. (Image at right: Tony Abbot at home in a coal mine. (Australian Financial Review))

They claimed that coal was akin to manna from heaven, and that wind farms were ugly, noisy and probably harmful. In this hostile environment, the turbines of Australia’s budding clean energy industry almost came to a grinding halt.

A few months later, many Australians are probably praying that, under new leadership, the government will be more progressive; the early signs are certainly promising. 

CPR for fossil fuels

‘Not content to simply cut the renewable energy target,’ reported the AFR, ‘Mr Abbott is now demanding that the Clean Energy Finance Corporation stops financing wind and solar which just happen to be the cheapest forms of clean energy.’

That’s precisely the point: clean energy has become cost-competitive with fossil fuels. In fact, wind power is already cheaper than fossil fuels, according to Beyond Zero Emissions. This is borne out elsewhere too: Genesis Energy in New Zealand announced in August 2015 that it would close the last two coal-burning units at its Huntly power station in Waikato due to ‘falling demand and lower-cost renewables.’

Australia faces the added cost burden of coal-fired power stations which are in urgent need of expensive renovation. ‘Within the decade,’ says the Climate Council, ‘around half of Australia’s coal fuelled generation fleet will be over 40 years old. Australia will need to plan and install new electricity generation to replace ageing generators.’

Their advanced age also means that most of Australia’s coal-fired power stations are much more emissions-intensive than those in other countries, including the USA and China. (Image above: the attractive Hazelwood PowerStation, Latrobe Valley)

Broaching the Great Divide

Clean or green energy has become a divisive issue in Australia, mostly fuelled by warring politicians. Yet, industries like these which require long term investment, shouldn’t be exposed to short-term political timelines and point-scoring, surely?

‘The least expensive zero emission option available at scale for deployment today in Australia is wind,’ reports the Climate Council, ‘closely followed by field scale solar PV. Over each full year, renewables are reducing wholesale electricity prices, not only in Australian states where wind and solar PV penetration is high, but in many overseas markets.’

Some governments and corporations have embraced renewables because it makes them look smart, progressive and responsible, but most are doing so only because of constituent and shareholder demands for higher profits and lower costs. If they were to take the economic argument, they could cross the divide and embrace all. (Image above: Spain's Gemasolar thermal power station can generate power 24 hours a day)

Rewarding bad habits

Fossil fuels may be cheap, but the coal industry alone receives about $6 billion in government subsidies, according to the Australian Conservation Foundation. Government subsidies for all fossil fuels come to a whopping $47 billion dollars over 4 years, when items such as the Fuel Tax Credit Scheme and the concessional rate of excise on aviation fuel are included, according to Reneweconomy.

Clearly, it’s nothing like an even playing field at the federal level, and Australia is a long way behind the rest of the world: Reuters reported on September 25, 2009 that G20 governments had agreed to phase out fossil fuel subsidies because ‘they encouraged wasteful consumption, distorted markets, impeded investment in clean energy sources and undermined efforts to deal with climate change.’ Actions at the federal level Down Under, at least under Abbott, don't align with this.

On the exploration side, the private/public split is even more skewed: ‘the world's top 20 private oil and gas companies spent $US37.4 billion on exploration in 2013,’ according to ABC News, less than half the $US88 billion provided by government subsidies.

States to the rescue

For years, the states in Australia have led the way on emissions and renewable energy policy, which should be urging federal action. New South Wales introduced the world’s first mandatory emissions trading scheme back in 2003. South Australia and Victoria followed with their own renewable energy targets in response to a low 2% federal target. 

Today, it’s not sunny Queensland (or the formerly progressive NSW) that leads the charge, but South Australia. This is the smallest mainland state; the one about which most recent news is negative - like car industry shutdowns, rising unemployment and likely loss of a major submarine contract.

Yet, basket case it is not, when it comes to renewable energy. South Australia set a target to generate one third of its power from renewable sources by 2015, and achieved it 18 months before the due date. The SA government recently announced its commitment to a  50% renewable energy target by 2025, despite a hostile federal government. 

‘The sovereign risk created by the Federal Government's unnecessary and unexplained review into the national RET (Renewable Energy Target),’ Premier Jay Wetherill told the media, ‘has caused a number of projects to be placed on hold, putting many construction projects and ongoing jobs at risk.’ The Woakwine Range Wind Farm near Mount Gambier is one of those: when complete, 123 turbines will produce one eighth of South Australia's energy needs. (Image above: Government of South Australia)

'The most desirable market'

‘South Australia is the most desirable market in Australia for investment,’ according to the Climate Council. ‘Since 2003, there has been $5.5 billion invested in renewable energy in South Australia, with nearly half occurring in regional areas ... South Australia has installed more large-scale renewable capacity since 2001 than any other state.’

Ross Garnaut, the eminent economist, put it this way: 'If South Australia were a country, it would have more wind and solar than any country on earth.' 

Leaders and laggards

No other Australian state has a current target to increase renewable energy. ‘Victoria and NSW have moved from leaders to laggards in Australia’s renewable energy race,’ reports the Climate Council.

It also tells us that ‘Australia is the sunniest country in the world and one of the windiest. Australia’s potential for renewable energy generation is 500 times greater than current power generation capacity.’ 

A new contender

Yet, South Australia is not entirely alone, it seems. On August 22 2015, the ABC reported an ACT Government announcement that ‘Canberra will be powered entirely by renewable energy by 2025.’

A tall order. Yet, if the territory delivers on its promise, the ACT will overtake South Australia to lead the pack in the clean energy stakes. Let's hope this territory government promise is better kept than many federal ones from Canberra.  

More than sun and wind

It’s not just the clean energy produced by sun or wind that is ready for broader exploitation, but also concentrated solar thermal power with thermal storage, and (existing) hydro-electricity or gas turbines fuelled by renewable gases and liquids produced from organic residues.

For all of these, Australia has a clear advantage over most countries, at least as far as natural resources are concerned. The Government's will to press this advantage might be quite another matter.

The challenge

So the question to Mr Baird and Mr Andrews is: are you going to sit back and let South Australia - the poorest mainland state in our country - kick all the goals for renewable technology, or will you do some of the heavy lifting?

Kim

PS. Some further reading for you:

The Australian Renewable Energy Race: Which States Are winning or Losing?

Green Power Success Stories Take the Wind out of Tony Abbott

Australia's Electricity Sector: Ageing, Inefficient and Unprepared

Australia’s Ancient Electricity Sector Urgently Needs a New Plan

Marketing Clean Technology: How to Get Cut Through.


Kim Brebach
Content Chief

I've always loved people and words. As long as I can remember, I've been a story-teller and the team here says I'm pretty good at it. That's probably why I head up the Content Team: I create the arc of the story and others add their magic. 


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