It's Make or Break time for Clean Energy in Australia

Since 2001, we have been hearing about Australia’s Clean Energy Bill, but are we running out of time to effectively meet it? Things have gotten a little more complex recently, as past governments were accused of simply lowering their expectations so as not to fail in hitting the targets, rather than opting to actually improve our reliance on renewable energy. So will we see a country proud of what it has come to achieve or just another broken electoral promise, alongside a parliament with its tail between its legs, hiding behind the excuse external economic influence?

Australia’s has an interesting relationship with clean energy. We are among the most environmentally friendly countries in the world, yet the policies which are directing our efforts have always been a contentious issue and are often one of the spotlighted debates during federal, state and even local elections.

In 2001, we were first introduced to the Clean Energy Targets, which were at that time, somewhat more convincingly titled the Mandatory Clean Energy targets. The original aim was to displace only 2% of our reliance on coal, fossil fuels and other conventional sources of power. In 2009, the targets were increased to 20% by 2020, or roughly 41,000GWh. In 2015, however, the Abbott government approved the Renewable Energy Amendment Bill which divided the target into two separate goals. First was the Small Scale Renewable Energy scheme which offers financial incentives for residential homeowners. The Large Scale Renewable Energy Scheme was also created which offers similar incentives to investors looking to build commercial scale projects for the purpose of wholesaling electricity by the kW. The Abbott government didn’t just revise the structure of the bill and successfully lowered the Large Scale target to 33 000 GW, down from 41 000 GW.

Today, we are still hoping to achieve, roughly, a 20% shift over to renewable energy, which is a substantial increase from 2001, despite the 2015 Amendment Bill. But, right now analysts have concluded that our current rate of progress won’t be enough to make the switch. Renewable energy sources, as of January 2015, are sitting at roughly 14%, 70% of which comes from hydropower (click here to see Australia’s energy diversity in more detail).

A 6% increase would seem manageable, but unfortunately there has been a huge slowdown in investment coming from the private sector. While things are finally starting to pick up, after a long period of political uncertainty, it may be too late to make up for the damage that has already been dealt. Worse still, the current policy stipulates that if we are to fall short of the goals set by the Clean Energy bill, traditional energy providers will be penalised each year the targets aren’t met. However, these costs are then simply palmed off to the consumer, effectively punishing the taxpayer for the inefficient and uncertain policies of past governments. .

However, it seems that there is more going on than simple political inaptitude. APPEA and the Australian Energy Council have often been accused of lobbying governments in an attempt to stifle growth in the renewable sector. Recently, Tasmania approved the installation and construction of more gas and diesel plants while ensuring that further development in renewable energies was postponed. An additional, 25MW of diesel generated power has been approved on top of a massive 200MW installation that was given the go ahead in 2015. This announcement came alongside plans to postpone debate on a second Bass Strait cable, which would significantly increase investor interest in renewable energies.

So while we are racing to displace traditional fuels, more power plants are being created and approved on a state level exposing the disparity between the idealistic targets of the federal government and the actions being undertaken leading up to 2020.

If the country as a whole doesn’t begin working cohesively to ensure we reach our energy targets, we will start falling short of the mark as early as next year, or more definitely in 2018. Kane Thornton, the head of the Clean Energy Council, put it simply by saying, "We are expecting all the major players will start taking action, meaning projects can move quickly, will reach financial close and construction will get under way,” but didn’t failed to mention that, "... if that hasn't happened by the end of the year then clearly there will be a problem."

To pick up the slack of previous years, an additional 3500-4400 MW will need to be approved. Government backed large scale projects are only predicted to create around 1800 MW of power, with the hope that the private sector will save the day. If we do end up failing to meet annual targets, the average homeowner could be looking at paying an additional $5-$8 on their quarterly bills to offset government penalties. The upside of course is that this will promote the uptake of small-scale renewables such as residential solar and wind, but at the end of the day, large scale projects are what make the largest impact and nobody wants to be paying larger electricity bills.

The Turnbull government has created some sense of certainty among the private sector, which could spur financiers to action, but as mentioned previously, it could be too late. Hopefully a more hardline federal policy will be put place to increase the uptake of solar, wind and hydropower at both a national and state level. Whatever happens, we will know with more certainty where things are headed this time next year. Either the nation will experience a renewed sense of hope or we will all paying higher electricity bills for no good reason while looking with envy at our tree hugging neighbour’s hybrid solar system and Tesla Model S.

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