Australia: PV to win in major political shift

The political environment for renewables and solar has appeared grim since the conservative government of Prime Minister Tony Abbott was elected last September. However a rare and major reprieve has been granted to the sector today in the announcement by Clive Palmer that his party will not support changes to the RET or the dissolution of the CEFC and Climate Change Commission.

Mr Palmer’s party will hold the balance of power in the Senate as of July 1, making any changes to the RET, the CEFC and the dissolving of the Climate Change Commission nigh impossible for the government.

The announcement is not all-good news for climate policy in Australia. Mr Palmer’s party will vote to repeal Australia’s carbon tax, instead replacing it with a carbon-trading scheme. The proposed carbon-trading scheme will not kick in until other nations agree to similar carbon programs.

From coal to renewables

The irony that Clive Palmer, who is primarily a mining and property developer and is currently seeking to develop a huge coal deposit in the state of Queensland, is backing the renewable energy sector in this way has been lost on few industry observers. Nonetheless, the move could reinvigorate utility scale PV Down Under and sure up government support programs for smaller-scale solar.

The RET mandates that approximately 20% of Australia’s electricity is to come from renewable sources by 2020 and it underpinned a number of PV power plants and many MWs of wind installations over the past four years. If the RET remains in place, utility scale solar is tipped to receive a major boost as utilities and major electricity consumers seek to add low cost renewables to their generation portfolios. With high irradiation levels around most of Australia that means a major boost for solar PV.

For residential PV, the RET underpins a certificate-based subsidy program – which likely would’ve been wound up if the RET was removed or diluted.

“The Renewable Energy Target (RET) has been an extraordinary success, helping five million Australians reduce their power bills by installing solar panels and solar hot water systems,” said the Australian Solar Council’s John Grimes. “Some 14% of Australia’s electricity now comes from solar and other renewable energy sources.”

“The Abbott Government should now end the sham review of the RET and simply allow the existing RET to do its job,” said Grimes.

Clive Palmer made his announcement today, in a joint press conference with former U.S. Vice President and climate change mitigation campaigner Al Gore.

“The Prime Minister promised the Australian people prior to the last election that Australia would retain its renewable energy targets. Now, like many other promises, he seeks to break this one,” said Mr Palmer. “The Palmer United Party’s role in the Senate is to keep faith with the Australian people. We will therefore not support any change to the renewable energy targets before the 2016, after the next election.”

Locking the RET in until 2016 will give potential large scale solar developments time to find funding and give utility or industrial off takers a push to develop renewable alternatives.

Al Gore’s role in Clive Palmer’s party’s stance in support of renewable is not exactly clear. Neither he nor Mr Palmer took questions after their press conference, with the latter saying they had an urgent dinner to attend.

“The Australian Solar Council congratulates Vice President Gore on his extraordinary global leadership on climate change, his ongoing commitment to solar and renewable energy and his support for the Renewable Energy Target, Clean Energy Finance Corporation and Climate Change Authority,” said Grimes.

Utility scale opportunity in Western Australia (WA)

Earlier this week, the WA Renewable Energy Alliance said that over 2 GW of solar could feasibly be developed by 2020 in the vast Australian state. With wide-open spaces prevalent and a high solar resource, the state could become a world leader in large scale PV.

In a submission to the RET review, the WA renewable energy group released modeling showing that if the RET is maintained, PV could grow to 320 MW of capacity in 2014, to 904 MW in 2015, 1.48 GW in 2016, 1.95 GW in 2018, 2.01 GW in 2019 and 2.078 GW in 2020.

“WA has an energy hungry resources industry, still largely reliant on diesel, and many rural and remote communities in which the cost of fuel supply and generation is extraordinarily high,” wrote the state’s renewable energy lobby group.

It noted that the state government currently subsidizes electricity in the state, which is largely sourced from coal and gas generation, by $500 million each year.

The WA-based Sustainable Energy Association said that the renewable energy sector needed the stability provided by the RET and welcomed the move by Mr Palmer and his Palmer United Party (PUP) today.

“Earlier this week, we saw the Government’s modeling around the RET confirm our view that the target will reduce prices for consumers and that the industry can meet the existing target in the timeframe,” said Kirsten Rose from the Sustainable Energy Assocaition. “PUP’s move to back the RET will ensure the tens of billions of dollars poised for investment will flow into the economy, and Western Australia in particular.”

Figures from the Sustainable Energy Assocation show that 80 MW of PV projects are in the advanced development stage, however have stalled due to uncertainty surrounding the RET.

The Australian Renewable Energy Agency (ARENA), which the government also seeks to do away with, was not covered by Mr Palmer’s comments today. The Sustainable Energy Association’s CEO Kirsten Rose said that ARENA works in concert with the RET and should also be maintained.

ARENA supports a number of solar, large scale PV and battery projects and companies in Australia.

The Australian Broadcasting Corporation reports that Mr Palmer’s plan for the carbon tax and renewable energy programs will top the agenda when he meets Prime Minister Tony Abbott for the first time in two years tomorrow.