Powering Australia from renewable sources

Anita Talberg, Science, Technology, Environment and Resources Section

Australia has various natural advantages that can be used to kick-start the transition to energy security, independent of fossil fuels.

Today’s renewable energy mix

Renewable energy accounts for two per cent of total Australian energy production, five per cent of primary energy and seven per cent of electricity generation. Most of the electricity generation from renewable sources is hydropower (almost five of the total seven per cent). It provides 60 per cent of Tasmania’s and 20 per cent of NSW’s electricity generation. Wind power is the second biggest renewable energy contributor. Together, wind and hydropower account for more than 90 per cent of Australia’s renewably generated electricity. South Australia is home to almost 50 per cent of Australia’s installed wind power capacity and another 22 per cent is in Victoria. Bioenergy (that is, energy produced from biological sources) provides most of Australia’s primary energy produced from renewable sources. Although Australia is the continent with the highest average solar radiation per square metre, solar energy accounts for less than two per cent of renewable energy production (or 0.1 per cent of total energy consumption).

Australian production of renewable energy (Petajoules) - Text version

Australian production of renewable energy (Petajoules)

The road ahead

The wealth of Australia’s renewable energy base suggests that it can play a much more important role in powering the country. Hydroelectricity production decreased 17 per cent in 2007–08 due to the drought, and a lack of suitable sites limits the growth of hydropower in Australia. However, electricity from wind has seen continual growth since 2002, as has solar power (although, as a late-starter the solar sector has not yet reached the same level of maturity as wind). Bioenergy has the capacity to increase its contribution to Australia’s energy mix by the year 2030, potentially by 60 per cent. In addition, technologies such as geothermal and ocean power are currently under evaluation. For these technologies to come to fruition, several technical and economic hurdles will need to be addressed:

  • cost, especially upfront capital costs of renewable energy projects is still a major barrier to the growth of the industry. Some has been alleviated by the Renewable Energy Targets (see the Renewable Energy Target brief) but the industry continues to call for assistance in the form of upfront subsidies
  • intermittent supply is often cited as a reason why it is difficult for renewable energy sources to completely replace traditional sources. This is certainly the case for individual wind and solar plants which rely on unpredictable or time-limited resources, but energy storage (for example, with molten salt) and a varied renewable network can go some way towards alleviating the problem of intermittency and
  • geographical distances between where the renewable energy resources are and where the demand for energy occurs, pose transmission problems. Areas of high solar radiation are inland and wind speeds are high along the southern and south-western coastal areas, whereas consumption is concentrated in grid-connected areas of the capital cities.

These barriers are not impossible to overcome. Costs are already being driven down by state and Federal policies. The RET, state/territory feed-in tariff schemes, and Commonwealth grants such as the Solar Flagships Program are examples of existing government support.

Feed-in tariff schemes

A pro-rata payment made to individuals or companies that feed renewable energy into the grid. Australia has state-based feed-in tariffs.

To increase support, governments might consider loan guarantee programs such as those offered in the US, tax credits, and co-investment schemes to reduce the risks for lenders. Management of electricity demand, such as through smart grids and smart meters, can reduce the challenges of peak loads. Further, non-intermittent renewable sources, such as geothermal and bioenergy, are intrinsically suited to baseload power generation.

Solar Flagships Program

A $1.5 billion Commonwealth Government grant launched in May 2009 to support the deployment of four large-scale solar projects. A shortlist of eight projects was announced in May 2010.

Finally, long-distance interconnections between solar or wind power plants and the grid can be realised with high-voltage direct current links, as is proposed between North Africa and Europe.

Getting the mix right

With these technologies and robust policies, an expanded renewable energy base is possible for Australia. According to Beyond Zero Emissions, 100 per cent renewable energy supply is technically possible by 2020 using only proven technologies, at a cost of $370 billion over 10 years. Other supporters call for increases to the 20 per cent target under the RET. The Australian Conservation Foundation advocates a target of 25 per cent, the additional five per cent to come from large-scale solar power stations. Some climate groups advocate special funding for emerging technologies such as geothermal and ocean power. Australia has an abundance of geothermal energy yet only one plant is in operation (in Queensland). More sites are being explored but high capital costs render the sector dependent on government support. On ocean power, a recent study by CSIRO scientists found that about a half of Australia’s current electricity consumption could be met by converting just 10 per cent of the near-shore energy along Australia’s southern margin into electricity (the authors concede that this is an ambitious target).

The ‘right’ mix will be a combination consisting of more wind, solar and bioenergy, rather than hydro, and room for new industry entrants. A price on carbon is likely to favour investment in renewable energy projects and allow the market to ‘pick the winners’. Without a price on carbon, the renewable energy industry needs longevity and certainty in government policy to find the right mix.

Library publications and key documents

Australian Bureau of Agricultural and Resource Economics (ABARE), Energy in Australia 2010, ABARE, Canberra, 2010, http://www.abare.gov.au/publications_html/energy/energy_10/energyAUS2010.pdf

M Wright and P Hearps, Zero carbon Australia stationary energy plan: Australian sustainable energy, Energy Research Institute, University of Melbourne, Melbourne, 2010, http://media.beyondzeroemissions.org/ZCA2020_Stationary_Energy_Report_v1.pdf

Geoscience Australia and Australian Bureau of Agricultural and Resource Economics, Australian energy resource assessment, report prepared for the Department of Resources, Energy and Tourism, Canberra, 2010, https://www.ga.gov.au/products/servlet/controller?event=GEOCAT_DETAILS&catno=70142