17 May State vs State renewable race hotting up in Australia
The recently elected Labor Government in Queensland has committed to generating half of its electricity requirement using renewable sources by 2030, and to ensuring that 1 million Queensland homes have rooftop solar systems by 2020 (currently 400,000 homes have these systems).
Energy Minister Mark Bailey confirmed the commitments prior to a speech at the Australian Solar Conference in Melbourne, and also announced the establishment of a Productivity Commission which will be charged with providing a policy pathway to achieve them.
Queensland’s commitment aligns the state with the two other Labor Governments in Australia- South Australia and Victoria. The commitments of these three states directly oppose that of the current Abbott Federal Government which is cutting the target for large scale renewables and is looking to maintain reviews which further the uncertainty in the sector. South Australia’s target is 50% of it energy from renewables by 2025 and it has already achieved 40% to date. Victoria is looking to establish its own RET (renewable energy target) as it did a decade ago, prior to the MRET being scrapped by current Industry Minister Ian McFarlane, who was also Industry Minister at the time. Recent legislation however prevents such State based schemes. One option open to Victoria is to hold reverse auctions and award contracts of difference to avail additional renewable energy capacity as is currently done in the Australian Capital Territory which has a 90% renewable target by 2020.
Queensland’s current large scale renewable energy capacity is limited apart from some biomass plants which use sugar cane waste as feedstock. A 44MW solar thermal booster plant is planned for the Kogan Creek gas plant and the largest solar PV system in the state is in Gatton. According to a recent Bloomberg New Energy Finance assessment, up to 2600 MW of large scale solar could be constructed in Australia, with the majority of this based in Queensland, which needs to supply hungry LNG plants.
Minister Bailey stated that the Government wanted to ensure that householders received a fair price for solar- one that balances the benefits and costs of the technology. The addition of battery storage at individual household and grid level would increase the benefits as such storage can add stability to the grid and facilitate the accommodation of more renewables.
In aligning themselves against the current Federal Government in Australia, these Governments are mirroring what is being done in Canada, and their individual and combines actions in the face of the current Federal Government’s stance should be applauded. There is of course an Industry or private sector analogy with respect to those who are willing to move despite the prevailing Government policy framework. In a number of previous blogs I have discussed examples of internationally recognised brands moving on climate change and reaping considerable rewards for doing so.
The quantity of goods imported to and exported from Australia underline the importance of trade to the financial position of the country, and in terms of the private sector in Australia, the time will surely come when those overseas to whom Australian companies supply goods or services will be questioning those Australian companies’ stances with regards to a number of issues such as climate change and emissions reductions. There is a real and present threat that the Australian companies may lose out to their international competition if their customers don’t like the answers they provide on these matters. We all know that business can be (and is) somewhat ruthless, and Australian companies need to be cognisant of this rather than waiting for the Federal Government to mandate climate change related performance and behaviour.
If you are an Australian business that wants to maintain its competitive advantage and international customer base and manage the impact climate change has on your business, please get in touch.