Professor Ray Wills has had a wide-ranging career at different times as researcher, academic, planner, consultant, adviser, manager and executive.
Ray has substantial expertise in ecology, sustainability, climate change science and the effects of expected future climates on Australia, and is recognised as an authoritative commentator on policy and functional responses to mitigate and adapt to global warming. Ray is Chief Executive of the Sustainable Energy Association, a business peak body actively supporting action on sustainable energy in all sectors of Australia’s economy in all regions of Australia as well as an Adjunct Professor at The University of Western Australia
Around the world, collective investment in renewable energy projects continues to be greater in dollar value than electricity generation projects from all other forms of energy source. Australia must move to emissions free energy solutions if we are to create a competitive 21st Century economy in a decarbonised world, as the rest of the world is doing.
The good news is Australia has massive renewable energy resources and these projects will diversify and grow Australia’s sources of energy, increase our industry base, and create a more robust environment for business and a more sustainable economy for this Century. But future energy generation and energy use will be more sophisticated with smart homes and smart cars plugging into smart grids and liveable towns and cities driving a sustainable economy.
The world is moving, but is Australia ready?
All nations must take the renewable lead of others such as Germany, as it reaches a 20% share of renewable energy generation, and the European Union as a whole, as well as China, Korea and (in the wake of Fukushima) Japan.
China is now the benchmark for the rest of the world because China is both leading and pushing world clean energy markets – leading through its own industry development and export of goods, and pushing through its own domestic plans for renewable energy projections and consumption of renewable energy, while growth in energy demand is being offset by greater energy efficiency.
According to data from Bloomberg New Energy Finance, last year China invested US$48.9 billion dollars in renewable energy with analysts tipping this number will be even higher again in 2011.
In continuing to demonstrate its ambition and leadership in the renewable energy space, in August 2011 China’s government announced a new feed-in tariff for solar that will guarantee solar developers a payment of 1 yuan (US$ 0.15) per kilowatt-hour of electricity that is delivered into the grid.
Then in September, China revised upward its renewable power consumption goal by 2015. China’s commercialised renewable energy consumption will provide for more than 9.5 per cent of the total consumption during the period of 12th Five-year Plan (2010-15) period. By the end of 2015, the grid-connected installed capacity of wind will reach 100 gigawatts, photovoltaic power capacity should reach 9 gigawatts, solar thermal power capacity will reach 1 gigawatts, and biomass power capacity should reach 13 gigawatts. The policy includes objectives for geothermal, tidal energy, and ocean energy for the first time.
This comes at the same time as the release of the 30th Ernst & Young Renewable Energy Country Attractiveness Indices (CAI) which provide scores for national renewable energy markets, renewable energy infrastructures and their suitability for individual technologies. There are few changes from the previous edition with China maintaining is global leadership position as the best place to invest in renewable energy.
Next door, Korea also has ambitious plans - the world’s 13th largest economy is aiming to be the world’s “7th Largest Green Economic Power by 2020, and 5th Largest by 2050” laid out as a legislative commitment in 2010 in “Laws on Green Growth in Korea.” Korea aims to develop 38 billion in investments in the clean tech sector by 2015, resulting in a 10-fold increase in employment to 110000 employees and generating 362 billion in exports by 2015.
China’s GDP is roughly some eight times that of Australia, Korea’s not quite 1.5 times that of Australia – if Australia was to proportionately match Chinese or Korean investment in relative GDP terms, Australia would be investing in excess of US $6-7 billion to renewable energy annually.
Meanwhile in Australia, both Federal and most State Governments have failed to properly consult with industry prior to decisions resulting in substantive changes, and this has made it very difficult for any business in the sustainable energy sector to plan effectively.
The renewable energy industry continues to be plagued by government decisions that lead to boom/ bust cycles and fail to provide the conditions needed to grow the industry sustainably.
The one bright spot in the renewable energy industry in Australia is Queensland – which according toQueensland Minister for Energy and Water Utilities, Hon. Stephen Robertson MP, this all makes sense because, after all, Queensland was the ‘Sunshine State’.
Minister Robertson recently emphasised that Queensland’s commitment to clean energy growth was driven through the Queensland Government’s full acceptance that a response to climate change is essential, and that this is time for action, not inaction.
Minister Robertson outlined how Queensland was taking action through both short-term incentives and implementation of longer term strategic goals. Action is being achieved through strong policy, a well resourced Office of Clean Energy actively implementing the Queensland Renewable Energy Plan (QREP), consistent State Government support for domestic and commercial solaracross Queensland. The Minister highlighted the recent appointment of Dr Lorraine Stephenson as Chief Clean Energy Advisor to the Queensland Government and the impending completion of a revised QREP to be released later this year as a further demonstration of continuing action by the Queensland Government.
More than 107,000 Queensland households now receive a feed in tariff and the the Government was supporting domestic installation of renewable energy because distributed generation on homes was displacing the need for new fossil fuel based generation, was helping households offset the rising price of electricity, was a popularly accepted measure by Queenslanders.
As the nation with the world’s best renewable energy resources continues to lurch through policy valleys of death, all Australian Governments need to become even more ambitious in the support for renewable energy generation. Other Australian Governments would do well to look to the Queensland approach to policy for renewable energy.
While Australian renewable energy markets continue to lurch through policy valleys of death, global markets and in particular those in Asia are expanding beyond growth simply based on exp rts to include growth more securely rooted on domestic consumption.
A carbon price will be a key part of future market development, and pricing carbon delivers certainty to markets. Certainty allows businesses to grow sustainably, to recruit and retain staff to undertake work, and for projects to proceed with confidence. Certainty is bankable and allows businesses to underwrite growth in their operations and will reduce funding costs arising from reduced loan risk, an outcome that will continue to bring down the cost of renewable energy projects. and give further stimulus to renewable energy generation.
But in Australia, a carbon price is still far from certain – even once the legislation is through the Parliament, until we get past 1 July 2012, no bank will be prepared to release funds for any substantial project because of the risk of a change of government and so the reversal of the carbon tax legislation.
It is my view that when we look back 10 years from now at this decade, that we will recognise that around 2010 / 2011 the world changed. This transition holds promise for many nations, but also holds the risk that non-renewable solutions may be taken in that same time that lock developing nations into energy projects with a 30 year life that will contribute greenhouse gases to the planet and expose those nations to the increasing cost of non-renewable fuels rather than the price certainty that indigenous renewable energy projects offer.