russell marsh, clean energy council - strategic vision for the clean energy industry
DESCRIPTION
Russell Marsh, Policy Director, Clean Energy Council delivered this presentation at the 8th Annual WA Power & Gas Conference 2014. The conference represents a timely meeting for the industry to hear about the current changes affecting the WA energy and electricity market. For more information, visit http://www.informa.com.au/wapowerconf14TRANSCRIPT
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THE RENEWABLE ENERGY TARGET
Russell Marsh Director of Policy WA Power & Gas Conference 11th March 2014
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KEY MESSAGES
The RET works • Since it was introduced in 2001, it has been very effective in driving the roll out of renewable energy, and changing Australia’s energy mix.
• The RET has delivered $18 billion of investment in large and small scale renewable energy - bioenergy, hydro, solar and wind.
• Australians of all political persuasions want more renewable energy
The cost of the RET is small • Current cost of just 3-5 per cent of average electricity bill,
• Small price to protect Australia from rising gas prices.
Reducing the RET does not reduce electricity prices • Reducing the target increases our reliance on gas
• Creates enormous sovereign risk and strands $10 billion worth of large scale investments
• Australia could miss out on another $18 billion of investment and 10,000’s jobs over the next decade
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HISTORY
• 2001 - Mandatory Renewable Energy Target (MRET) introduced by Howard Government.
• Objective to deliver 9500 GWh of additional renewable energy generation by 2010 (2 per cent increase).
• 2009 – RET was expanded to deliver additional 45,000 GWh by 2020 with support of Coalition
• 2010 – scheme was split (a change again supported by all major parties) into:
• Large-scale Renewable Energy Target (LRET)
• Small-scale Renewable Energy Scheme (SRES)
• 2012 – Comprehensive review of the scheme. Key conclusions:
• Scheme was working and mechanism should be largely left alone
• Reducing the RET would not reduce electricity prices
• Two-yearly reviews driving uncertainty and should be removed
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RET ACHIEVEMENTS
• Since 2001 the RET has delivered:
• Over 6000 MW of additional renewable energy capacity that diversified our energy mix.
• $18.5 billion investment in renewable energy technologies
• Wholesale energy prices as much as $10/MWh lower
• Emissions are 22.5 Mt CO2e lower as a result of the RET. Without the RET Australia
would not have met its emission reduction target under Kyoto.
• More than 2 million small-scale installations - solar panels and hot water
• If left unchanged the RET is expected to deliver:
• An additional $18.7 billion of investment in energy infrastructure between now and 2020
• Wholesale energy prices are expected to be up to $9/MWh lower
• 1000 MW less gas fired generation capacity
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CURRENT RENEWABLE ENERGY GENERATION
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CURRENT RENEWABLE ENERGY GENERATION
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CURRENT RENEWABLE ENERGY CAPACITY
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COST TO CONSUMERS
AEMC estimates that the RET is
around 4 per cent of the current
unit cost of electricity
Source: AEMC Residential Electricity Price Trends, December 2013
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COST OF GAS IS RISING
Source: Dart Energy and Innovative Energy Consulting
“East coast gas prices will rise, potentially to as much as triple the current $3-$4 per gigajoule; this increase would be several times larger than the costs related to carbon pricing”. Australian Industry Group, 2013.
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COST OF RENEWABLE ENERGY IS FALLING
Source: Bureau of Resources and Energy Economics, Australian Energy Technology Assessment 2013
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MORE RENEWABLE ENERGY MEANS LESS FOSSIL-FUELLED GENERATION
As South Australia’s use of wind energy has increased from about 5 per cent in 2005
to approximately 24 per cent of annual demand by 2011, its use of coal- and gas-fired
electricity has reduced.
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REDUCING THE RET HAS NO BENEFIT
• Reducing the target will:
• Increase exposure to higher-cost gas
• Damage $10 billion worth of large-scale investment made over the past decade
• Increase risk premiums in the Australian energy sector.
• Analysis by SKM MMA has shown that if the RET target was reduced, wholesale
electricity prices would be $10/MWh higher than they would otherwise be.
• Uncertainty about carbon policy, plus closure of CEFC and reduction in ARENA funding
will already slow renewable energy development.
• Only beneficiaries of lower RET are coal and gas generators, not consumers.
Reducing the RET will not deliver lower retail electricity prices
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AUSTRALIANS SUPPORT RENEWABLES
118 Countries
around the world
now have some
form of renewable
energy scheme.