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Australia must act now on renewables or be left behind

Last week, Griffith University’s Vlado Vivoda argued that renewable energy “makes no economic or political sense” for Australia. While we welcome Vivoda’s contribution to the national energy policy debate…

A renewables boom is on the horizon for Australia. Adrian S Jones/flickr

Last week, Griffith University’s Vlado Vivoda argued that renewable energy “makes no economic or political sense” for Australia.

While we welcome Vivoda’s contribution to the national energy policy debate, the conclusions he draws fail to account for the clear imperatives for quickening the pace of renewable energy deployment.

First and foremost of these imperatives is climate change. Given the prominence of climate change in the political sphere, and the fact that it is a key rationale for advancing renewable energy technologies, it is puzzling that Vivoda discusses Australia’s energy future without acknowledging the implications of climate change.

The bulk of Australia’s carbon emissions are produced by the stationary energy sector. To address climate change, this sector will have to shift from fossil fuels and embrace zero-carbon energy sources.

The Australian Climate Change Committee’s report, The Critical Decade, reveals the scale of the challenge. “If we wish to have a 75% chance of observing the 2°C guardrail,” the report states, “we can emit no more than 1000 Gt (one trillion tonnes) of CO₂ in the period from 2000 to 2050.”

The problem is that Australia has already consumed more than 30% of its per capita entitlement since 2000, and therefore has some responsibility to accelerate decarbonisation of the economy.

Although Australia is well endowed with fossil fuel resources, their continued use carries social, economic, and environmental risks.

Vivoda properly notes that “energy poor” countries such as Spain, Germany and Japan have a clear interest in reducing their dependence on imported energy.

Renewable electricity generation has allowed these countries to tap local energy resources and limit their exposure to energy price rises. This strategic trend represents a risk to Australia. As one of the world’s largest producers and exporters of energy, our biggest challenge is not energy dependence but rather what might be termed “energy export dependence”.

With climate change and energy security driving the large-scale deployment of renewable technologies, what will Australia export if no one wants to buy coal anymore?

How will the Australian economy fare when the massive export revenue currently generated by coal declines?

Australia will need new export industries to fill the gap. Projected by The Pew Charitable Trust to be worth between $1.7 and $2.3 trillion over the next decade, the global renewable energy market presents a huge opportunity. Measures that develop domestic renewable energy manufacturing and expertise are in the national interest.

This was the Prime Minister’s reason for looking to Spain where well-designed feed-in tariffs (FiTs) are rapidly increasing concentrating solar thermal generating capacity.

Not only that, but the Spanish have built and are now operating the innovative Gemasolar solar “power tower” that uses molten salt energy storage technology to generate electricity 24-hours a day.

Concentrated solar thermal now feeds more than 700 MW of renewable electricity to the Spanish grid. Tariffs have facilitated enough private investment to install 2500MW by 2013, with the Spanish solar thermal industry projecting to have 10,000MW operational by 2020.

Feed-in tariffs have been similarly successful in Germany, Europe’s fastest growing major economy, where the measure has resulted in the sustained expansion of photovoltaic electricity generation. The cumulative installed capacity of photovoltaics in Germany increased from 2900MW in 2006 to over 17000MW in 2010.

There are differences between Spain, Germany and Australia that should be acknowledged.

Unlike our European friends, Australia’s solar resources are substantial, yet when it comes to solar PV Germany alone has out-installed us 10:1 on a per capita basis.

With about 200 times the per capita sunshine of the United Kingdom, and massive wind and geothermal resources, Australia has a bigger slice of the renewable resource pie than just about any other developed country.

We have a competitive advantage, should we choose to use it.

Decisions about renewable energy happen in the political arena. Vivoda presents cost of living impacts as a barrier to renewable energy policies.

According to the government’s chief climate change advisor Ross Garnaut, “Australian households and businesses enjoyed relatively stable and low retail electricity prices for many decades.

“Despite recent increases, he adds, "they continue to enjoy relatively low prices by international standards.”

Although Australians enjoy relatively low-cost energy, proponents of renewable energy policies must address the perception of cost of living pressures if effective efforts are to be politically feasible.

Renewable energy measures can be a political winner. CSIRO’s report Communication and climate change: What the Australian public thinks shows “most Australians… exhibit a strong preference for renewable energy.”

80% of respondents supported government action to increase renewable energy research and development.

In an EMC poll from November last year, 79% favour government support for the renewable energy sector.

If the Australian public’s strong support for renewable energy research, development and industry development is any indication, the prospects of well-designed renewable energy policy appear promising.

Renewables are coming down the cost curve faster than expected. Even industrial giant GE is predicting solar PV will reach grid parity (in the US) in three to five years' time.

If Australia doesn’t get on board soon, we’ll miss the boat.

This article was co-authored by Leigh Ewbank (Ba. Soc Sci Environment Hons, RMIT University), Director of Communications at climate and energy think tank Beyond Zero Emissions.

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9 Comments sorted by

  1. Vlado Vivoda

    Research Fellow, Griffith Asia Institute at Griffith University

    The take on my piece misses the point. I was arguing that comparing Australia and Spain's energy profiles makes no sense. That is what my piece was about. I did not discuss climate change at all and that was not the aim or the intention. As per renewables not making sense, I argued that a major commitment does not make sense "for the time being". I also did say that the PM's commitment to the expansion of Australia’s renewable energy sector is commendable.

    In any case, I am very pleased to see that, willy-nilly, I've stirred some much needed debate.

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    1. Patrick Hearps

      Researcher, Melbourne Energy Institute at University of Melbourne

      In reply to Vlado Vivoda

      Vlado, so what time period are you referring to "for the time being"? You seem to have missed the point again. Discussing renewable energy in today's environment must include the consideration of climate change, it is almost irrelevant to have a energy discussion without doing so. If climate change was not a problem, then no, there would not be as much incentive to use renewable energy. However unfortunately it is a problem that has been known to science for almost 180 years, that the UN committed to addressing almost 20 years ago, that every new report on climate science that comes out today is getting more dire. Serious reductions in emissions will require the use of renewable energy. Are you proposing that Australia continues to delay action on climate change while the rest of the world moves ahead?

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    2. Vlado Vivoda

      Research Fellow, Griffith Asia Institute at Griffith University

      In reply to Patrick Hearps

      Patrick, not at all. Australia should not delay action on climate change. In fact, Australia needs to be an active participant in global climate change governance architecture. All I am saying (and all I was saying) is that we are not positioned to be leaders in renewable energy. These are two entirely separate points.

      While climate change is on top of global governance agenda so is energy security. This cannot be ignored and many countries and individuals have no energy choices that we do in Australia…

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  2. Mark Duffett

    logged in via Facebook

    Anyone fantasising that spending billions on renewable energy R&D will somehow lead to Australia becoming a RE powerhouse (in the manufacturing or any other sense) should take careful note of the fact that right now, Chinese manufacturers are in the process of out-competing the much-vaunted European first-movers: http://www.climatespectator.com.au/news/european-solar-sector-feels-heat-china

    This is the major reason why renewables are 'coming down the cost curve'. No matter what research breakthroughs…

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    1. Paul Richards
      Paul Richards is a Friend of The Conversation.

      In reply to Mark Duffett

      Mark's reference to the Reuters article;
      "European solar sector feels heat from China"
      Highlights the need for our change to solar domestic homes, and a reduced dependence large on coal / oil / gas power generation.

      As the article points out;
      "...... Chinese module makers are now selling at about $1.50 per watt, compared with $2.25 on average in 2009."

      This dramatic drop in solar panel costs is typical of the economies of scale the Chinese - and global uptake of solar energy provides.

      It would be an intelligent and civilised society that takes this as an important indicator of future trends. Trends that are gaining momentum. It could be time to gain a strategic advantage in the efficient use of heat conversion to energy via solar panels. Looking seriously at support of domestic conversion, rather than dismantling the support process.

      http://www.reuters.com/article/2011/07/19/us-solar-europe-idUSTRE76I4CL20110719

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  3. Byron Smith
    Byron Smith is a Friend of The Conversation.

    PhD candidate in Christian Ethics at University of Edinburgh

    Shorter Vivoda: Because Canada will never be a world leader in the production of alternatives to asbestos (given the relative cost advantage of asbestos), it faces no moral obligation to accelerate the slow phase out its asbestos industry.

    Yes, we do need energy more than we need asbestos, but the parallels are interesting. Canada's peddling of a natural substance shown to be highly detrimental to human health makes it something of a pariah on this issue. How long before nations that continue to peddle old and dirty fossil fuels are looked at with similar international suspicion?

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    1. Vlado Vivoda

      Research Fellow, Griffith Asia Institute at Griffith University

      In reply to Byron Smith

      I am not and have never supported the production of asbestos in Canada or anywhere else. In fact, I know very little about asbestos, other than the dangers it poses to those who come to contact with it (asbestosis, etc.). Byron, please refrain from making out-of-context, ludicrous statements about what I have argued.

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    2. Nick Kermode

      logged in via email @hotmail.com

      In reply to Vlado Vivoda

      Vlado, Byron appears not to have had made any comment at all on your thoughts about asbestos. He seems to be using it as a parallel or analogy to enhance the faults he sees in your reasoning. I would have to agree with him.

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  4. Doug Evans

    I posted this comment on Leigh Ewbank's blog but as I'm interested to hear what responses people might have to it I'll post it again here.
    This is a good post making important points Change is coming but can it be quick enough? Looking at the report on the decreasing cost curve of renewables that you linked to (Hearps & McConnell 2011) I note that: Cost of PV electricity predicted to fall to between $300 and $100/MWh (depending on who you believe) by 2030. Cost of wind between $140 and about $85/MWh by 2030. Cost of CSP (the hope of the environment movement for renewable baseload power) between about $210 and about $60/MWh by 2030. Contrast this with predictions that geothermal baseload energy can be delivered by 2020 for between about $50 and $100/MWh from the north Flinders Ranges and (if the latter prediction proves reliable) ask yourself which ‘renewable’ gives us the best chance of getting out of this fix.

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