POLITICS OF CARBON
Renewable energy is back in focus as Australia prepares for a carbon- constrained world, writes Matthew Warren
THE debate on whether Australia will have a national emissions trading scheme ended last week with the Howard Government’s commitment to a national scheme from 2012. But the debate on how to power the economy in a carbon constrained world is just beginning. Fossil fuels have underwritten growth across the global economy cheaply and efficiently for the past two centuries, helping to fund the investment in technologies that will ultimately replace them. But which ones and when?
Jockeying has already begun to influence the two key policy settings that will influence this transition in Australia: the detailed construction of an emissions trading scheme and the design of the supporting strategy to help pull through new low emissions technologies. Business is relatively unfussed about how the energy is generated so long as it is cheap and abundant. They also favour a transition path that is smooth and predictable. Shocks and spikes are highly undesirable.
This means in the transition to a near zero emissions energy supply by the end of this century, renewable energy technologies in Australia will be competing with gas — and possibly clean coal, subject to its successful development — and nuclear power.
Whether this is a sprint or a marathon depends on what technology you are trying to sell. As the current lowest cost large scale renewable energy provider, the wind industry favours policy settings that drive relatively immediate deployment of renewable energy sources as the most direct way of pulling technologies through at scale.
Auswind chief executive Dominique Lafontaine says emissions trading on its own will not be enough to get the renewables sector on line in the scale required for deep longer term cuts by 2050.
‘‘ By supporting increased deployment of cost effective zero emission energy technologies such as wind power, the Australian economy can be confident that it is growing the very sector that will provide clean power for the best price in order to secure our international competitiveness,’’ she said.
The wind industry supports and is the primary beneficiary from the federal Government’s 2 per cent mandatory renewable energy target. They would like it hiked to 5 per cent or more, claiming increased deployment is the best way to drive down costs.
Australia has been a world leader in solar technology, driven originally in the 1970s by the combination of a sunburnt country and wide brown land — the practical need to supply a host of small and remote locations with electricity. The University of NSW and Australian National University are internationally recognised hotbeds of solar technology development, with growing frustration that most of these ideas end up being commercialised overseas.
They argue this is because of a lack of government support at critical stages of the research and development cycle coupled with weak venture capital markets in Australia compared with many countries overseas.
Many experts in the solar sector were critical of the Howard Government’s recent $ 150 million doubling of rebates for installation of photovoltaic ( PV) cells on domestic rooftops. While PV electricity works to offset demand at expensive peak load times, it is still some of the most expensive electricity in the market with the full cost of the cells often not recovered over their entire 30- year- plus lifetime. Critics of this scheme argue it is great for retailers and some manufacturers, but is still largely symbolic stimulating imports of PV cells more than a dynamic solar industry in Australia.
They will be encouraged to see greater recognition of the key steps in the innovation cycle discussed in the Prime Minister’s Task Group report released last week.
The report explicitly recommended that revenue from selling emission permits under an emissions trading scheme be ploughed back into investing and accelerating these technologies at the critical precommercialisation stages. The cost of PV does continue to fall as manufacturers learn how to slice the super expensive high grade silicon ever thinner, but cheaper solar is more likely to come in the medium term — by as early as 2025 — from large scale solar thermal and solar concentrators.
A trial solar thermal project using parabolic mirrors to magnify the sun’s energy is under development by a company, Solar Systems, near Mildura in Victoria, helped by $ 450 million from the Bracks Government and $ 75 million from the Howard Government’s Low Emissions Technology Development fund.
In the shorter run, one of the biggest potential sources of clean energy in Australia may come from tapping the heat of hot rocks deep under the earth’s surface. As with wind and solar, Australia is blessed with some world class geothermal energy resources centred around the Cooper Basin in north- eastern South Australia. Early trials have been encouraging but have also demonstrated the practical difficulty of pumping water more than 4km underground to create steam which can power turbines. New drilling technology due to be installed next month may lead to a trial of a 40 megawatt power plant which will confirm whether the technology can fulfil its potential as one of the lowest cost sources of renewable energy.