NEG – National Energy Guarantee and its Australian Future

NEG – The future of Australia’s National Energy Guarantee hangs in the making this week as state government cabinets meet to discuss their positions on it, ahead of Friday’s Council of Australian Governments meeting.

NEG – National Energy Guarantee

The Australian is reporting that Energy Minister Josh Frydenberg has accused Labor states of “politicking and posturing” ahead of the meeting.

NEG - National Energy Guarantee - Energy Minister Josh Frydenberg
NEG – National Energy Guarantee – Energy Minister Josh Frydenberg (source: JoshFrydenberg.com.au)

“This is politicking and posturing ahead of Friday’s meeting, because the states know all well and good that what will hopefully occur on Friday is that we agree to the design of the national energy guarantee subject to a phone hook-up after the policy has been through the federal Coalition party room,” Mr Frydenberg said on ABC radio.

Mr Frydenberg continued talking about what Australia can expect from the NEG: 

“It’s a 38 million tonne reduction, but importantly it’s a $550 annual saving to Australian households and a 20 per cent reduction in wholesale prices,” he said.

He noted that there’s no reason for the state governments to cause any issues for the NEG as they will still retain the right to have their own RETs:

“Nothing in this policy prevents the states from having their own renewable energy targets. “They complement what is being done at the federal level, but we do need the federal government to maintain whole responsibility for this, because it’s a national problem and it requires a national solution, and it’s the federal government that is the signatory to Paris, not the states.”

Ed McManus, chief executive of Meridian Energy Australia and retailer Powershop, said states should back the NEG despite the emissions target being less than many of us had hoped. Mr McManus said he thinks some of the potential benefits of the NEG are already taking root in the futures market:

“I do believe some of the benefits of the NEG are already built into the forward prices. You only need look at the impact of the recent coal outages on calendar 2019 wholesale [futures market] prices, where prices have rallied $7-8 per megawatt hour,” Mr McManus said.

Labor frontbencher Michelle Rowland discussed what she sees as NEG flaws:

“We have a situation where we have very low emissions targets under this government’s policy, but in particular, this would absolutely stifle investment in renewable energy, and if you want to talk about jobs, you need those large scale renewable energy investment decisions to be made in order to drive those jobs into the future in this sector,” Mr Rowland told Sky News.

“This government wants to say it’s focused on innovation and science and all the rest of it. “Again, this shows that there is absolutely nothing joined up when it comes to their policies in this area.”

As usual it’s impossible to expect the politicians to stand up and try and make decisions to benefit the nation, so who knows what to expect ahead of Friday’s meeting. Renew Economy have a great hit piece on how the coalition have come up with the $550 / year figure. We weren’t exactly overly charitable about it when Malcolm Turnbull announced the National Energy Guarantee last year, so it’ll be interesting to see what happens over the coming weeks. Watch this space! 

 

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Renewable Energy Storage Target for South Australia

South Australian premier Jay Weatherill is on the campaign trail at the moment – promising to introduce Australia’s first renewable energy storage target (which the state will subsidise) and also upping the current state-based 2025 renewable energy target from 50% to 75% (given they’re already at 48.9%).

Renewable Energy Storage Target

Jay Weatherill - Renewable Energy Storage Target for South Australia
Jay Weatherill – Renewable Energy Storage Target for South Australia (source: @jayweatherill on Twitter)

Weatherill was at an election forum which was about the environment on Tuesday (the 20th) and said the South Australian state election to be held on March 17 will be primarily focused on renewable energy – a ‘referendum on renewables’ of sorts: 

“If we go down, they will be wagging their fingers at everybody around the nation, to say that’s what happens if you push too hard into renewable energy,” Weatherill said. “That’s what the prime minister is trying to do and that’s what is going to happen.”

He has promised to lift the renewable energy target to 75% and implement a renewable energy storage target which would be 25% of SA’s peak demand – approximately 750MW of storage. The government would help the private sector meet this target through subsidy arrangements. 

Weatherill discussed his party’s policy further with Guardian Australia, noting that South Australia are happy to continue ‘going it alone’ if they’re not going to get any help from the Turnbull government:

“It’s a rejection of the federal government’s approach – and the state Liberal party’s approach,” Weatherill said. “We’re not interested in putting our leadership in renewable energy in the hands of people that don’t believe in a renewable energy future.”

Carnegie Clean Energy reported yesterday that they have secured $3 million in government funding to build a 2MW, 500 kWh Battery Energy Storage System (BESS) at the General Motors Holden site in Elizabeth, South Australia. With the rapidly decreasing cost of large-scale energy storage, it seems that the Renewable Energy Storage target shouldn’t be too much of a problem and will be a massive help to baseline power and will also assist in reducing the blackouts which plagued the country in 2016.

“This solar and battery project by Carnegie is part of a wave of new investment in South Australia we have leveraged through the $150m Renewable Technology Fund announced as part of our energy plan,” Weatherill said at the time.

In further news, Weatherill has today announced that South Australian households will be able to apply for a $10,000 loan to cover the cost of installing solar panels and battery storage – which we’ll cover tomorrow. 

 

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Labor’s “Powering Queensland’s Future” Plan

Premier Annastacia Palaszczuk and her incumbent Labor party have fired the first renewable energy salvo ahead of the looming Queensland state election on the 25th, promising $150m to support new large-scale renewable generation and solar power in schools as part of their Powering Queensland’s Future plan. 

Powering Queensland’s Future

Premier Palazczuk announced the Powering Queensland’s Future Plan on Sunday while she was touring the Clare Solar Farm project in Ayr (in the Burdekin electorate which is currently held by the LNP). It includes $97 million for solar schools, a huge $50 million down payment for a new solar thermal power plant, $3.6 million to decarbonise remote communities, and a $1 million study for renewable solutions for the Daintree.

Annastacia Palaszcuk - Powering Queensland’s Future
Annastacia Palaszcuk & Labor – Powering Queensland’s Future (source: couriermail.com.au)

Under the plan, the Government will establish a new company called CleanCo which will be mandated to deliver 1000MW of renewable energy in Queensland – with a special focus on flexible and dispatchable renewable energy (e.g. portable solar power). 

According to the Brisbane Times the funds would support a pipeline of $20 billion in proposed investment and it’ll create up to 15,000 full-time jobs, situated mostly in regional Queensland where unemployment is higher than in the cities. 

“We are committed to our transition to at least 50 percent renewable energy in Queensland by 2030,” Premier Annastacia Palaszczuk said.

“Our Powering Queensland’s Future Plan (delivers) delivering more of the cheapest form of new generation – renewables sooner to complement our young and efficient fleet of coal and gas-fired generation.”

This is in stark contrast to the LNP’s plan to scrap the RET (Renewable Energy Target) if they are elected, believing that it’s time for the free market to decide on renewables vs. fossil fuels via their ‘Cheaper Energy Policy’. According to Labor’s policy, “Funding was cut (under LNP) for the Solar Dawn project, which would have delivered Queensland’s first solar thermal plant near Chinchilla, along with investment and job and training opportunities in regional Queensland,” calling the Newman-Nicholls government “complete renewable energy blackout”. 

Opposition Leader Tim Nicholls called the policy “more subsidies for more renewables that are going to cost jobs in regional Queensland”, and noted that they think baseload power is more reliable. 

 

 

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Darwin Solar – What’s Going On?

As Australia’s sunniest capital (Darwin gets more sunlight year-round than any other major city – an average of nine hours every day), Darwin solar is certainly in the doldrums. As per the Australian PV Institute, the entire Northern Territory’s PV solar output as of January 2017 was a mere 4,049MWh (the lowest in Australia, less than Tasmania, and a ridiculous amount behind state leader Queensland who output 126,629MWh that month). What’s wrong with solar power in the Northern Territory, its capital Darwin, and what can be done to fix it?

Darwin Solar – the situation

According to the Australian Energy Council‘s latest report, residents of the Northern Territory are paying the second highest for electricity in the country, behind Tasmania. The ABC website quotes John Grimes of the Australian Solar Council that a third of homes (freestanding) in QLD and SA have PV solar installed on their roof, but this number is only 11% in the Northern Territory.

Darwin Solar - Australian Solar Installs 2016
Darwin Solar lagging behind in Australian Solar Installs for 2016 (source: abc.net.au)

The Northern Territory has a renewable target, which is to reach 50% renewable energy by 2030 – so it’s obvious that something needs to give if they’re going to get anywhere close to that. ABC quote an adviser to the NT Government, Alan Langworthy, who notes that the number of solar installations in the area is “artificially low” – noting that 40% of occupants in Darwin are renters, and as solar power for renters is still a tricky and mostly unexplored topic, it makes sense there will be less solar installations.

“Having a very high transient [and] rental population in the NT tends to have driven down enthusiasm in rooftop photovoltaics,” Langworthy said.

Also to note is that solar panels need to be signed off by a building certifier, which adds ~$900 to the cost of each installation. Perhaps another reason uptake has been slow is that back in 2011 when states were offering high tariffs to incentivise initial uptake, the gov’t offered 19.23c/KwH to feed back into the grid – in comparison to 44c/kWh in WA and QLD, or 60c/kWh like Victoria.

Perhaps the answer is for the government to consider some sort of subsidisation scheme or generous tariff for residential solar – maybe something targeted specifically to landlords could be a step in the right direction.

We will see what the NT have in store when they release their policy on how they plan to reach the 50% renewable energy target.

It’s not all doom and gloom for the area, however – Alice Springs solar has been boosted by the $8.3m BESS (Battery Energy Storage System) which Vector Energy will be installing by late 2017 to help improve the reliability of base-load power for Territorians. We’ll wait and see what impact this has on Northern Territory solar and which steps they take in order to try and reach their Renewable Energy Target.

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Finkel Report could raise cost of Solar in Australia

The Finkel Report for National Energy Market security was released last week. Chief Scientist Alan Finkel’s review of the NEM included 50 recommendations, one of which was the implementation of a “generator reliability obligation” which could have serious ramifications for the cost of renewable energy in Australia. The closing of ‘dirty’ coal-fired power plants such as the 1600MW Hazelwood earlier this year has put a large dent in our installed capacity, which has been slowly sinking as we attempt to transition to renewable energy in an attempt to meet our 2030 Renewable Energy Targets (RET).

Finkel Report Australia MW Capacity Energy
Australian Installed Energy Capacity – 2017 Finkel Report

Finkel Report

According to the Sydney Morning Herald, under Finkel’s recommendations, the average household would save $90 per annum on their electricity bills over the decade from 2020-2030. This would be through the implementation of Finkel’s ‘Clean Energy Target’ – as opposed to a ‘business as usual’ situation. The report, which you can read by clicking here, notes that the value of Australia’s wholesale electricity market trades $11.7 billion. There are 9.6 million metered customers and, with rapidly increasing electricity prices it is obvious that something needs to be done. Balancing the price of wholesale electricity and the reliability of the grid whilst trying to meet climate change obligations is a very tricky and delicate process.

In an attempt to mitigate this, there are some repercussions for solar. The “Generator Reliability Obligation” and some changes to new wind and solar plants could pose serious problems for the next 10 years of renewable energy in Australia. Firstly, Finkel advised that plants be equipped to provide voltage and frequency response, which is reasonable. But the big one is a very controversial recommendation that individual wind and solar farms be self-reliant to provide ‘dispatchable generation‘ (i.e. backup power)  – rather than looking at more holistic/system-wide solutions. Even though many solar farms are being built with battery storage a ‘hard and fast’ rule like this could have implications for investment in large solar in the future (as battery storage costs have been shrinking, they are still significant).

The Finkel Report and the “Generator Reliability Obligation”

Kane Thornton, CE of the Clean Energy Council (the CEC represents businesses involved in solar and wind renewable energy generation) was quoted as saying – “Many new renewable energy and energy storage technologies and solutions are now available to help manage energy security”. Many large-scale solar plants being built these days are including battery storage

We don’t want a repeat of the the blackouts that plagued South Australia last year so it is understandable that energy security remains paramount whilst our energy economy transitions. It’ll be interesting to see which recommendations are taken on board and which aren’t – but I think the ‘generator reliability obligation’ could prove to be more trouble than it’s worth if it stifles innovation and curbs investment with blanket rules on new solar plants.

With the proposed $16.5b Carmichael coal mine by Adani Mining still being discussed (the mine is expected to produce 2.3 billion tonnes of coal over 60 years), it seems like we are reaching a flashpoint with regards to the crossroads of global warming, employment, and profit. The rest of 2017 promises to be a very interesting time for Australians and their electricity.

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South Australia Renewable Energy

South Australia Renewable Energy targets are being smashed for 206/17. The SA government’s official target for renewable energy is 50% of demand and they were hoping to reach this by 2025. Recent figures released show that large scale wind power and rooftop solar PV in South Australia has already reached that target easily – measuring at 57% this financial year.

South Australia Renewable Energy –

South Australia Renewable Energy 2017
South Australia Renewable Energy 2017

The Australian Energy Regulator released a report last week that shows wind+solar has reached 57% in the 2016/2017 financial year.

According to the AER, “In the nine months to 31 March 2017, the contribution of wind generation was even greater, supplying 50 per cent of South Australia’s electricity,” – this is as a result of Snowtown Wind Farm (currently 368.7MW) and Hornsdale Wind Farm (currently 315MW) reaching key stages in construction and affecting the output considerably.

Although wind power is currently generating huge numbers of energy for South Australia, The Australian Energy Market Operator (AEMO) expect that the amount of PV solar rooftop will double by 2025 (this will result in over 1500MW). The most important thing at this point is figuring out an intelligent way to organise battery storage of solar energy as this technology continues to evolve. South Australia has had a torrid 12 months with regards to energy blackouts and it’s imperative that we find a way to manage situations where the wind doesn’t blow and the sun doesn’t shine. The Bungala Solar Project (220MW, to scale to 300MW) is slated to start supplying power by summer 2018 and reach full capacity (220MW) in August 2018.

Last week we also released information on the Clean Energy Australia Report for 2016 which showed that SA generated 5,508Gwh in renewables, with a penetration of 48%. RenewEconomy have estimated that Bungala and the Lincoln Gap wind farm (212MW) will take the state to 65% renewable – by far the biggest of all the states in Australia. Although South Australia has battled with power issues over the last year it is exciting to see how motivated they are to ensure they generate as much renewable energy as possible. As the state upgrades its ability to manage rapidly evolving technology whilst mitigating the swings in available wind/solar we are sure they’ll continue to lead Australia in the industry and are excited to see what this means for the future of renewable energy in South Australia.

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Solar Q Gympie Solar Farm $2b Development Proposal Lodged

Solar Q, a Queensland based solar company, has lodged a development application with the Gympie Council as they are currently proposing to develop a $2b solar farm and battery storage 30km north-west of the city. Terrific news for renewable energy in Queensland and we are really excited to see how they manage the energy storage aspect of the project.

Solar Q MD Scott Armstrong

Managing director of Solar Q, Scott Armstrong, has been quoted by the ABC as advising the project is Australia’s biggest solar + energy facility. “To give you an idea of size, at ultimate design it will provide around 15 per cent of south-east Queensland’s energy requirements from both the solar panels and the 4,000 megawatt hours of energy storage,” Mr Armstrong said.

The plan is to build this amazing facility in stages, with the first stage (which Solar Q have already applied to build) totalling 350MW. This is slated to increase to 800MW by 2021 – enough electricity to power around 315,000 houses. The solar farm will connect to the grid at a Lower Wonga substation and can feed energy to Kilkivan, Gympie, Palmwoods, Caboolture, Beerwah – and will even be able to feed into North Brisbane and all the way north to Gin Gin and central Queensland.

Solar Q Gympie Solar Farm
Solar Q Gympie Solar Farm Approximate Location

The 17km2 site will house around 3 million solar panels and help ease the load on power stations during periods of peak consumption such as night time or during heatwaves.

To put these numbers into perspective, Queensland has the highest rate of business and residential solar in the country, a total of 1,805mw with over 32% of homes having solar panels installed. This project would increase the number by almost 50%, ensuring QLD can continue jostling with SA in the fight to be the solar capital of Australia. It looks like the 2020 RET (Renewable Energy Target) of 33,000 GWh of renewable sourced energy is still on track.

Renewable Energy Target 2020 Australia
Renewable Energy Target 2020 Australia (Source:cleanenergycouncil.org.au)

Gympie Solar Farm Project Description

As per the Gympie Times, the project will:

  • Generate around 735,000MWH/an which will power 127,000 homes (we assume this are figures for stage 1)
  • Generate 350MW of Solar PV.
  • Create 450 full time jobs for 18 months during construction.
  • Create 6-8 full time ongoing jobs.
  • Reduce carbon emissions by 666 tonnes of co2 – which is as much as 180k cars.
  • Be housed on 572 hectares of cleared grazing land, adjacent to the Lower Wonga substation.

The Approval Process

Mick Curran, the Mayor of Gympie, was quoted as saying that “there doesn’t appear to be any great hurdles to overcome” – noting that the project will create 450 jobs during its construction and he would “certainly look forward personally to seeing all of these approvals come to fruition”. If there is no problem with the  Gympie Council or State Government Agencies, work on the Solar Q Gympie Solar Plant will start by the end of 2017.

The plant will be funded without government help – by a combination of private investors and superannuation management funds.

Watch this space for more information on this exciting development!

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