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Carbon tax
4-page pull-out
Renewable Energy
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TheSa.
tech"obgyoverc. rimgy"rs.
Ploto: BILL CLARK
Wind power likely to dominate in early years, then solar is expected to heat up
Cheap perlntts sign. alslow s'art
Overview
Treasury in Gini^ forthe
Mareus Priest
carbon rice scheme putsthe
2014/5 carbon price at $29. But
Bloomberg pr jotsthe collapse in
'If solar thermal or
PVCa" deployed
'The carbon price from this point the required scale and price, it has a
is likely to trackthe system's price number of benefits over wind,
floor, whichrises gradually to
inclu inghaving muchmore
$17.50 in 2020. As mand from the predictable availability. Solar
'^:::t^;4^!^;;,\;^:';^^!^"'to ^;,:^::;;, am^^:^;^:,;^:;^:^" at tile req", red scale expect
::'^^:^:^^:::;:^::It::^:'
the international carbon
fired generation by 2020 du to a
will fall much lower,
should comprise a larger portion of
Australia's energy mix"
The fulling cost of the technology
price to fall below the Australian
price floor. *
and the high Australian dollar
Westpacheadofinftastructure would alsohelp driveso18rprojects.
'"The commercial and technical
andutilities Didjet Van Notsays the
amd rice, it has a
weakintemationalcarbon market,
Bloomberg clean energy analyst
buttherenewable energy target of
KobadBhavnagrisaysthetransition number of benefits
20 per cent windriveinvestment - from a carbon tax to a market. based
co andtrade scheme in 2015
energy landscape between 2020 and viabinty of the next generation of
mainly in wind teelmology.
over un, ,d. '
2030 will notlook much different
solartowertechndogy has been
However, the consensus opinion meansthe price signal to invest in
Westpac's DidIer\^n Not from today, giventhelifocycleof proven, "saysACCIONAEnergy
of participantsin The Austinli", I renewablesislikelytobef^irlylow
Oceaniadevelopment 'rector
investment initie energy sector.
financial Reviewrenewable energy until2020 because of the ability to
Andrew Thornson. "Plans are
"Buttherearea number of
roundtableisthatwhile windwill buy international permits.
"We forecast that the carbon
under wayto buildthese jests at
interesting unknown variables, "
dominate over coining years, the
scale and to make substantial
Van Notsays.
cost of solar energy is uickly
price is likely to dedine from $25 in
"Ifsolarthennalor PV
contributions to global energy
2014/5 to $16 in 2015-16, " says
coming down and will become
IPhotovoltaicslcan bedeplo at supply. "
competitive sooner rather than later. BhavnagrL
Carbon GetsTaxed
Butthedebate goeson, .
On 13 September the Government introduced its carbon price legislation to the
parliament. This ground-breaking legislation wit now be dissected and debated
overthe coming months. Business and industry are stintryingto understand the
issues and developments. Being prepared is paramount.
Do you have aquestion aboutthe newCarbon Planthat BDO can answer
for you? Lodgeyourquestion at bcc. coin. a"
DistinctiveIyd' t-it's howweseeyou
AUDIT. TAX. ADVISORY
IBDO
24
The A"
n Rinncl,
Tuesday 20 September 201. ,
Carb, on Tax
Participants
Re ewabe Energy
The future
The state of play
"any",,"arsel""alga
tod, .do^"hushon^"SIbr
r
GaryW6a, e, ,
Chairman, Industry
Rinds Managernent.
Policy Gemi, ,Iy . . . will
electricitygenerationwil becausedby 11^ 11
toad^win^"^,
g^
,g 2000MWofbrowncoal^itedcapacity.
bluntssWhy1, "1'111iereb. orige^ Leeltiscertainly possibleto shiftto
,epb"rentalmm^
MORAustralia's rtunate position of
having an abundance of cheap, fossil
fuelenergy o tions haslargely negated
the needfor the developmento its
renewable sources of energy, and the
SouthAustralianenergymarl, et, in What"maleelea"o1.0rgyb"dsea"e
and Denmarkshowthatthistransition hikilkei"roan^an Whichfomtsof
ispossible, withwindenergyleading rine, ,able", orgy. ill .'
theway. LC=hourview, allrenewablesare
worlddasseolar, win wane and
likely to succeed Its more a question
geothermal resources in the absenceof Whilell, orrise, ,, pipelineo, Mereble
of proportion and, the timing of that
.
innediately contorth arc""d
eventual success.
$20 billion in new invest, "e"I. attof^diveregitlatoryframeworkthat d'orgypr^Is?
priced
the
environmental
cost
of
fossil
11^Thereia
a
very
substantial
pipeline
"08
The International Energy Agency
fuels.
dB. of renewableenergyprojectsin isnowsayingthat20percentof
GW:Windisby forthecheapest of
Australia, mostly windf^rins.
thesetechnologiesintermsoflarge- Currently thereis 17.6GW(^igawatts)
scale energygeneration, but iris still of wind projects in the pipelinein
Tom
Regional Director BP
Solar AUStralasia.
It is likely that fossil fuels will
still doni"ate power
global power will be supplied by solar
by 2050, Ithink difforent markets
windemand different combinations
more omensivethar, burning broom Australia. IfconstnEcted, these
of clean energy technologies. For
coat This is exacerbat by thetact
projects would amountt0 $35billion example, Carnegie's coTO wave
of new investment.
that the gridhasbeendevelopedto
technology is idealIy suited to remote
assist oristing coalfired generation
island markets where there is often
ICS Our project development pipeline
andwateris made available at
tosome $2 billion The technology mix insufficientland for large-scale solar,
negligible cost for cooling.
where wind is not wanted in a
includes solar, wind, geolhennaland
run^f-river h
us= A10t of developers have been
tourism environment and there isn't
struggling to get Ielectricity'l retailers
"F= mis very substantial The 2010
term period, people are notreally '
sufficient biomass foedstock
Mr: Our view is that salar and wind
winGross thswithinthis
timeframe. ereasoniswind is not
correlated with demand whereaa sdar
11thad
Lead Clean
touroftaking arketriske.
LC: While renewable energy has been
more
in the past, the health
Analyst Australia,
and environmental costs of mining
has a positive correlation, although it
is for from perfoct.
This essentially gives Bola a leg-up in
gener ' "pt02020-2025.
to pay a pricedIat makes the prqject
economical Withoutgetting aretoner
listing oftenewable power projects
un inning the priceoveralong-
Bloomberg New Bier^,
Finance.
,
the costrace, a so far, solar PV
fobotovoltaicjin particular has
an burning fossilfiiels have never
beenappropriately allocated Past
shifted down the experience cost
curve considerably faster than anyone
in the utilities sector of the industry
anticipated
Ir: It depends to a large extent on the
price of natural gas. At current prices
studies in Australiahaveshownthat
By 2020 we forecast tl, at
brown coalgeneration, for example,
A"SLralia will have nore than
5GW of small-scale PV.
marcessof $50 a tonne of Co,
attracts ahealth andenvironmentcost
emitted
Iselte hardto balmve now, but as
recently as 1998, the oilindustry was
P
mer
11n un ... solar corer co"re
of gas, you winget coal. to-gas
shifting for new entry and some
focusing on onshore wind andsolar.
when Queensland coalseamgas
energy,
"S= We must begeeingmore
shifting in short-run dispatch There
renewables by virtue of the RBI'
is a lot of gas capacity already in the Irenewable energy targetjbut we thinl
system that doesn\runnery much it will be primarily gasin Australia.
with a carbon price of zero. However,
183.1arreally", ohmre"fre
if gas rises to international parity
for Iifo with oil at $101bbl
Its really only since 2004
that oilprices have moved sharply
higher. 'Riday, wind and biomass can
AndreuTh", Ison
be co titiveandsolarPV
Director Development,
ACCIONA Energy.
tohonoroltaic!is certainly getting
closer to panty with fossilfiids.
begins to beexported, than amuch GWS Most of the new generation
The 1.11, re doesn't hinge on
."e single technology.
'3rdbrine
ripeesibh*. chin
Gridmpa"dab"", artusl?
Mr: About 85 per cent of Australian
electricity production is sourcedftom
to cause this shift.
coal. Transitioning the sector away
from incumbenttechnologies neednot
riaser
Chiefexecutive. AGL.
The key ele""it o1.11e
carbon price sche", e is the
targeladoj, Led beyond 2015.
higher Garbo price will be required
Ifgas-fired generation fails to make
listed more than 129 individual
reduceourrelianceoncoalfi, r
proposals, with an aggregate
generating capacity of 12,600MW
electricity, The elegance of amarket
whichwere capable of producing
mechanism is that the cheapest
abatement options are those a pted
by the market
KB: The carbonprice will probably not
' ethe economic signal to retire
about33,200GWh[gigawatthour] -
more than enoughto satisfy the
capacity built over the next 10 years,
given current policy Bettings, will be
gas-fired and wind But the relative
mroads (due to high fuelprices), then cost curve for solar technologies is
renewableswillneedtqmakea fulling andislikelytobeginyielding
greater contribution to the energy commercialsdar-powered largescale
mix Those that come down the cost electricity generation withintiie
curve quickest to coin te with the
current decade. There is always a
Currentleast^OSt option - wind chance a new technology will burst
are likely to succeed But we must
on to the scene due to intensified
recognise that dueto our relatively researchdriven by the seriousness of
smallpopulatiori, Australian
residual 20 per cent REFtrenewable
dimate change science.
energytargetl, ThemIue of these
deployment has a minorimpactin
ATS AcerONA is already building
project proposalsis about $32 billion. technology cost reduction relative to
hundreds of megawatrs of utility
coal^I'itedgenerators before 2020 buttt With the reductions in costwe are
global deployment.
should provide tile long4erinprice
seeing for solar, we a, pectto seemore TS= There is ito silver bullet. Its
scale solar thermal andsolar PV
sigpalto preventnew coalplants being large-scale solar projects a edtothis difficult to try and predict one
companies are doing the samein
built Thegyeatestshiftfromcoalfired project pipeline.
plants in Europe and the Us. Other
winner. ^'omBP'spy 're, weare thesecountriesandinothers. The
The price of carbon
effective withoutthe central economic
Whatareco", pantssd. ingtcpre"rotor legislation. Themextstepwasto
beln"""chandracarhy, p^co?
determine eligibility. for free permits, sumeruralchange agent arthe core of
likely to be drivenby the cost of
buying credits from themternational
waiting. Afiew people have started to finally, develop optimisation
negotiate contrasts. Therellbe a lot of strategies andcarbon abatement
businessesthat 'tevenreali8eitS lograms.
there. 'sstaggeringhowlittlepeople gun ergtandingtheim or On
GW: A clear mechanism that investors
omitake into accountforthe future
rather than endless debate and
IEuropeanUnion emissiontra ' g
schemel slows, we expectthe
international carbon priceto foil
actually appreciate whatis going OIL earnings, whichwillinclude an
in:It has a very
in:At themoment, ,they'rereallyall again hairlycomple, Kmskandthen, the ckage.
market. As
uncertainty.
andfromtheEU
andtri-generation are likely to provide costs andthe availability of
compensation in the form of cashor
permit allocation.
emissions. Companies are looking at
optionsfor making their o rations
more efficientAsane, ,ample, AGL Whatdoyo"believe ishekeyeb, ,wild
recentiy entered into ariagreementto hererbo"pricesGID", e?
builtin a decade.
810wer
country transitionsto
carbonfuture. In tileshort*erm,
000SildOe, IOU^Ibe, 100", agea",
encouragedGinonstration and
deployment - assolar PVbecomes
additional transitional measures -
the development of suchtechnologies,
netto, rein. abb
carbonpriceitselfis unlikely below the Australian price floor.
to 'veasigyificantshiftawayfrom MOB FortheemergingTenewables
reduction on 2000. levelemissions has coal-Ired electricity generation before sector, it is the complementary
bipartisan support. As such, this
2020. We forecastthatthe carbon
TS8 The first step is to validate
targetislikelyto bedte key driver o price innkely to dedine from $25 in
greenhousegas umbers andwhile BP doing asit will determinethelevelof 2014/5 to $16 man15-16 with the
had been collecting emissions data for abatemalt re
sum of the traded market. This is
competitive with fossil-fuel generation
within the nortfive years or so.
rig One of tilestrong points of the
package is the $13 billion available
through
A&CEFCtOean
support mechanismsthatsit alongside Energy Finance Corporationlfor the
a carbon price that are key to driving development anddeployment of
innovation. Wave, geothermal andto a renewables and other clean energy
lesser extent largescale solar are at
options. This is a strong commitment,
manyyearsit wasstilla I^iny in^jor ., rs Without doubt, the price itself. The essentially because the way the system the higher fish'rewardendofthe
taskto ensure antiiedatawasfiilly complementary measures are
compatible with the proposed
important and helpful, but not
TS8 In time, the carbon pricing
suchas the solar Flagshi
ro
- are necessary to foster
AltonaplruitinVictoria. The focility beyond2015. misworthnotingthat IDE
the 2020 target of a 5 percent
particularly daring times of lower
invesnnent{isk appetite.
targetis maintained, iris an
agg
ramp-up overtime and
provides an opportunity to transform
the economy.
construct a state<>f4he^rt
tosoertl, e
MrsThekey element of the carbon
cogeneration focitityforQenosatits priceschemeisthetargetado ted energy?
represents Australia's largest
industrial cogeneration plant to be
intensive andcanbe difficultto fund
mechanism will assist Australia asthe
ive long-term
MR Energyefficiency, cogeneration assessment of the ability topasson target - 80peroentby20SO. Ifthat
verylow^OSto SIbrreducing
that of the ' atesector. New power
technologies are generally capital
asbeendesignedmeansthatfrom investmentspectt'minandoften
2015-16 the Australian carbonpriceis demand investment horizons beyond
cornmensurate with the scale of
in ittcalledforbytheGamaut
Review.
^avlew
WWWafr. coin
4
Participants
1:1 solar
d or natural gas
throug that will be the maindriver.
Ifwe have a subsequentintemational
agreement, that won't necessarily
change tilings in Australia that much
because Australia vinalready be tied
into that agreement through our
domestic framework, with similar
targets and similar obligations.
Is=Emission uctiontargetsare
clearly important, but in the
transportation sector we're seeing
mail, et forces deliver increasingly
efficient cars and planes. As the scale
of renewable technologiese ds
and costs reduce, we see consumers
pulling greater demand for deaner
energy.
.
lacks. "key
Head of Utilities. Energy
& Renewable Solutions,
Coinrronwealth Bank of
Australia.
nerd. "reare^^ingb
ge. ,^bilersb paya pricetl, at
inkesll, e ",^*econ""^aL
"arum Wilder
Head Global
aNironrnentalMarrets
and Climate Change,
Baker MeKerizie
11's staggering thou I'LLe
people actually apprec,
Caning". alla, calis, ionllvcalel, "pan what is goingO".
Laine, ,,, California, Gem""^Spina"d
China riderdoping ac, con"orgy
Industry?
IsB With regards to European
countries, I bareve Australia will
eventually surpass them in terms o
La"e
renewable energy development, and
we can competewidiCalifomia and General Manager
China. Australia is very well endowed Australia, Pacific Hydro.
with resources and we have abun ant
land on whichto buildlarge pro^Cts. 1,501areo"Ii""eSt08
It is more challenging, however, to
cheaper, iruillconpe, e, ,in
compete with China as a renewable
. .
fors in
Australia.
Pluto: GLB\IN
energymani, factoring base, asitis I"j"" later, 1.1sdecade.
with othe manufacturing sectors. I
believe we should focus on being a
commercial and technical viabilily of 5 per cent by 2020 or 80 per centby output and efficiency from incumbent renewable energyknowledgebase,
whichwould include a substantial mix
the next generation of solar tower
2050? romBP'sperspective, we have generators.
technology has been proven, It comes alwaysf^voured a cap and trade
us= Nobody really knows. Its going of renewables projects, but also
with higher capacity fortors and
system, so lets start with the desired to be a combination of a lot of things mature R&D capability, and specific
reduction in emissions and then let
storage technology to proride
- gaspricesandwhereblackcoal areasofadvancedmanufacturing
baseloadgeneratidn. Plans are now themarketdecidethepriceofcarbon. prices go as well, .. matsodepends andhightechnology.
under wayto buildthese projects at "FSTb incentivise new gas-fired
on the pass-throughofcarbon into rr: The goalislowering Australia's
scale andto make substantial
the wholesale price of electricity. Its
^;!'^I^^^,^:"9,81::^':11^^',^::;Iy- Tile relative cost
^':Ii;:^"'^^"':;'I;';:^^:^^^:"' errve for solar
reaUythe movement in wholesale
11.11an T"rank
lineslinenl Manager,
Cleantech \fontures.
emissions. The most cost^fibctive
way to do this may beto deploy
re technology tmost solar and
carbon rice. Whatthat levelis will
windtecbnology deployed in
a" depend on the bidding bebanjour Australia is not Australianl. It may
electricity price that reflects the
be neither efficient nor desirable to
,arts dine,
,, Id. ""daremm
hqto.^" in technologies is falling. of my,black
coal.andfired
plants,There's
to!brow
Australia
as wellifwe
willing
browncoaL
going try to compete with China in the
IVla"y renewable reso"reus
to"d to be ramob fron tile
exisli"g grid.
GaryWeaven, chairman, to be 810tof turing
invest in the change.
Where, Gosuiepr^Goreatho" "alto
got. dined. ango?
Industry funds Management
n the
manufacture of renewable energy
plants and some of these are going to technologies, but nor should this
have a look at what are their asset
nec
' y be the objective.
LC= Australia missed the boat on
lives now - are they going to see
ATSApriceof$50t0$608tonneis generation, the carbonpricewould longer orshorterasset!ives? - and someelementsbutwithclearpolicy
needed to drive I
their maintenance. That will affoct
to investment needto be between $20 and $30 a
and investmentsignals, it can
in windover the nextfive years' We tonne based uponcurrent commodity the prices that they're bidding in the certainly providecomponentparts
expect costs of other technologies
prices.
short and long term
manuf^sturmg - KeppelFrince
luridnel O"aviano
including wind power to come down However, there are likely to be a
Engineering in Portland is a clear
number of lower^OSt and small
substantially and become more
,ham"itartbtl, ede, ebp"". 10/11, a casein point. On technologies that
competitive during this period
opportunities for reducing emissibns. industry is aglobalagrco, ,e, ,, cribi"ding are at earlier stages, we potentially
red"sth"targets?
TS: The price depends on the timeline These include energy efficiency
have opportunities there in allied
Complementsrynecl, un
that sit ab"BSide carbon price
tore 11/01 key to mr. vato, ,
of change required Are we looking at opportunities and smallchangesin
UnWS Ageumi^g the carbon price gets
manufacturing.
Managing Director of
Carnegie Corporation
.
FuelTax Credits
A greater imposton business.
A new approach to fueltax credits is a key part of the Government's proposed Ca
Plan, Although riotimmediate, the approach is expected to affectthousands of
busine^ses. Understanding how it will affectyour organisation-will be paramount.
Do you have a question aboutthe new Carbon Plan or FuelTax Credits?
Lodgeyour question at bdo. coin. au
Distinctivety different - it's how we seeyou
AUDIT. TAX. ADVISORY
IBDO
The Aug. ralla"rina"cmlRevlew
42
Tuesday 20 September 20, .,.. WWWalr. coin
Carbon Tax
Re ewabe Energy
Investment
Playing politics
Ed. Incatlton see
What is ale approach of AUS". alto"
banks and superannualion fi, "ds to
renewable energy?
Ir: At the moment there is a capital
freeze in the energy finance
markets for large^cale new entry
plants due to the lack of certainty
as roct11^reinenit
Clean show
Clean technology stocks v S&PIASX 100 index I%)
80
CARBON POLICY AN"DUNCED > '
70
60
on carbon.
in, There's a lot of pressure on the
Feb'attiarm
Carbon Conscious
super fun andbanksto finance
CarnegieWave Energy
process too - educating on why
these .., are workable. think
CO2 Group
S&FIRSX Inn
Syl. x Systems
Jul 4
6
8
11
Dyesol
13
12
14 15
expensive than projects in other
project plan and they cam
markets. The renewable sector is
more establish overseas andthe
Australian financial sector is still
bed. nohad, rush^
emonstrate arecord of delivery.
While the technology may be
different, the basics of project
planning and delivery remain
constant. There aren't any
irisurmountable barriers and, an the
competitive position o renewable
energy projects continues to
improve over time, we would expect
financing to become increasingly
Mr: enewable energyprojects 11ace
available. Our experience with the
building capacity to fund projects
in the sector.
Whata, .,,, o9.00bs*
harmrs/dnlb"gustofl"and"g
renewable"Iergyprojects?Whatcan
is to demonstrate at their
proposed prt:jest has a robust
10
arge^cale PV built from 2.1 to
5.1GW by 2020.
00
1110: Ithink the best example of
another country acting proactiveIy ms Untiltheoppositionmakesit
The prospect of
6750 million over 20 years in
last time, and it didn't get
establishing a wind in risky which through, sothey'repiobablywaiting
in 2008 alone contributed twice
a hide bit longer this time.
I'llblic fi"anGing
crowding out
that to their GDP.
private financing
is something
that should be
looked at.
Grits windo with that when
it comes in. ^fo\, egot a lot of
crowdo", prints financing?
governments playing politics at the
"F= That is certainly something
moment
that should belooked at We are
obviously keen to engage with the
merit on exactly what the role
of the CEFC is and exactly how it is
going to interact with the RET
scheme because the onething we
are obviously concerned aboutis to
A
make sure there is Do diminution in
,
the incentive to invest for the
private sector in renewables as a
consequence of the operation of
that corporation.
uss That is one thing lain keen to
Moree solarfbrm basshown tha
KB: It could have a very significant
where commercial finance is not
andmanaged, and that thensk of
the investment is adequately
role in providing the "pull" for
technicalIy proven technologies that
available, or the volume of
commercial finance is not enough
the private sector will invest.
willp"him, Ina"orig
look into a bit further. '13, pically, , ,
what a governmentshould bedoing'
is only using an entity like that
111F= AGLeconomists produced the
initial analysis, which demons". ated
the impact of carbon policy
uncortaintyonel " prices.
They updated this initial analysisto
The challenges
rusts an area that tile CEFCcould
Whatarelliegr^chalkyesto
^brd^^,", re"ouchb
play ani ortantroleiii, to
energypr*CIS?
leverage privatesector financeinto
ATSThedimatechangedebatean largescaletransmission
interconnectiorL
TSE The bustsites for renewable
approach andbipartisan supportfor energy projects are ofteninregiona!
arespongeto climate change and areas, yet the cost andincentivesto
renewables, we willstruggleto drive connectto the grid are within the
change.
in^jor conurbations. We believe
us=Oneofthebiggestissues with governments, state andfodera^
should address network legislation
getting a prqject to
commercialisation is along-term toreflectandencourageafuture
certainty o price. The retailers have
beentaking on more of the price
NULLARBOR PLAIN
risk and not ying a premium for
EASTERllEHD OF TREELESS PL, .;N
longer-term ricecertainty.
includetheimpact of alackof
bipartisansupportfora legislated
omissions trading, scheme. While
investment would be likely to
itselfa badthing. It only becomes a $30 billion investmen by the
problem whenthelights go out. The utilities could be reduced drastically proceed, 810ss of capital market
networkisthereto matchsupply and by introducing incentives to install efficiency- higher riskpremium$
demand alleast cost to consumers, solarfarms or commercialsolar
being applied to jestdebt -
in should notbe orerbuiltto suittor FV systems on large warehouse
would result maround $5 billion in
subsidiselthe investment objectives
GWSBetterlinkages, forexample transmissionlinestotakerenewable throu Ithinkinmostpeo Ie^
betweenVictoria and South
energy from the Byre Peninsula into mindsthatpremiumwillreduee.
Australia, will themtate higher and the main grid ,,, but because of the History would say that the likelihood
way the regulatory rules have been a change. ingovernmentwouldresult
eveloped, you've now gotthis
maprogrambeing unwoundor cut
situation where there's a shortfinin back is probably relatively low,
financing, because you can't get
Thereha, ealr^^Iannhero,
enough people financing because
^linearitdn"gesi"hfomla",*to
they may never recover it, and if
they do recover it, they cant make a rane. abhoriergypoli. yse"ings. What
"coinfi"Gritslare"d'orkco, draints
decisions?
roofs.
higher costsfbrconsumers to 2020.
of power projects. There isno role WIW:We worked lastyear with
"S:Its a big question There's very
for public finance in this space,
Macquarieon the Green Grid
much a higher[risk] reinium now
Projectforthe SAgovernment That before legislation has bam
Whalea"bedo"ebaddross", oof
prqjecrwasdesign to build
butthenoncelegislationgoes
on fun, !ore"Guabbe"orgyi. ^ant
\,
AT: This is a significantf^ctor and
constrainsindustry progress. South
profit on it because it's allregulated impartwillll, Geeha, eforpb""all, E
\t, in need to change some of the
prqeGls?
rules and incentives.
11.8 T e planning law changes in
ATS The National Electricity
Victoriacoul utsignificant
Objective must acknowledgeand amountsofthe4.4gigawattwind
supporttlie introduction of
pipeline and billions of dollars of
Australia for instance has
significant untappedwind
resources, but relatively small
demandgrowthandlimited scope
for energy exports out of the state
mixed renewables corerono. Agood foster deploymen of renewables.
initiative would be identification of Public financesupport andprivate renewablesandthe newemissions
due to constraints on
interconnectors. Transmission
infrastructure investment must be a
tra
key to Australia unlocking its
renewable
potential
Irs Many renewable resources tend
to be remote from the existing grid.
Its also not clear whatthestate
Isherea dangerp"bit, Ina. ting will
ensuring that risks are identified
to priority for government and is
,
later with the a mori of"market invested 810tinthelea u to the
carbon nutionreductionscbeme
pulp tariffs, invested about
rincha"bus harehreducing
technologycosts?
associated topics are highly
politicised. Without an o1,601ive
solarindustryin Australia continues
to suffer from boom-bust cycles
generated by varying state and
foderalpolides notoptimisedto
worktogetherforthe longterrn.
and capturing a marketis the
clear what its actual policy is, there
40 Danish win market. Basically the will be uncertainty. Ithinkitis
Danes, initially through
unlikely the Coalition will unwindi^
but its not clear. A10t of coin nits
"technology ugh"grants and then
similar issues to other capital
projects in tenns of resource rislr,
technology rislr,
coinmerciaVfinancing risk,
construction risk, operating rigl:,
etc. The key for investors is
What'
from banksand superannuation
"bankability"hurdle, but also lower funds.
the cost finance 'rig them Is= Stable palicy and certainty is
more competitive sooner. By cutting crucial to alllongtemi
infrastructure investinents,
the costs orborrowing, loan
2019 in normal circumstances.
That could boostthe amount of
for immediate "locked in" cash
reflected in the expected financial
return of the project.
Is='inhe challenge for any developer
invesintentinrenewables largely
20
SOURCE UrulSC"E8W
ATE Policy uncertainty and the need
flow can be a limiting f^ctor for
investment by the financial sector
Its also our experience that the
highcost of debtin Australia can
make Australian projects more
callfortharound $20billion innew
30 guarantees, large^Gale PVwillbe expandandcontracrveryrapidlyas
constructed in 2017, rather than
government policy changes. The
^
and wholesale energy prices. Once
the backlog of rooftop PV
certificates are cleared - expected
to occur by 2015 - prices win
again reflect entry levels, a
necessary prerequisite for finance.
GW: Policy certainty aroundttie
continuation of therenewableenergy
targetschemeandasecurecarbon
pricing mechanism will immediately
"levelised" cost of energy of
subsidies as partoftheproject
finance. Insular we've seenmarkets
40 renewable generators. Our
modelling indicates that, with. loan jincountriessuch as Spainl both
Goodynamlcs
they'rejust nervous.
Mr: Right now the most significant
challenge is the low market price
for renewable energy certificates
mechanism They help emerging
technologies overcome the
Giniruimen. havoc""loinllulo,
rule"ables?
50 guarantees significantlyreducethe especially REDneswhichbankon
more in the renewables. fo date
they simply haven't done it. I'm
optimistic that in the longer term
they will Its part of an education
are not yeteconomically viable.
Loan guarantees can be an
effoctive and efficient support
Whimpaetwill"re"ItsI
renewables' precincts acrossthe
technologies and how bestthe
ion networks can'conn
investment could play asignificant reduction target0 80 percentby
role.
2050. This would allow concepts
nuchasthe Scale Efficient Network
TSS With respectto solar PV,
in n atriskOuranalysis
suggests that Victoria could lose 81.4
binionofinveeinientin 919
megawatts of new windprqjects.
to them
changes to legislation to increase the Extension rule, proposed in 2010 by LC8 While it is certainly
Mr: A powersystemfree of network amountofdistributedenergy across the Ministerial Councilfbr Energy, disappointing, twillmean
investmentsgoto otherstates and
constraintsisgoldplated. Network Australiawouldreducethe needto to progress, enhancing the
constraintsexist, and apply to all investso muchinupgradingtheerid industry's ability to implement cost- that Victorianretailere will
efl^ctive invesinients in remote
forms of generation investments, not to handlejust a ,^w hours of peak
effoctively import clean energy from
just renewables* and this is not of
loadinthesu Grinonths. This
trans 'rimfrastructure.
other states.
I^A042