Surge in solar power in Eastern Australia threatening sale price of power assets
Solar boom raises doubts on power asset sale THE AUSTRALIAN< ROSS KELLY
THE WALL STREET JOURNAL JUNE 30, 2015 When bidders crunch the numbers on a looming $26 billion auction of Australian power assets in one of the world’s biggest privatisation of this year, they would do well to cast their eyes upward, to the tops of apartment blocks and factories.
Business for fitters of rooftop solar panels in eastern Australia is flourishing as more households and companies choose to generate their own power rather than relying entirely on electricity from the grid.While solar remains a small part of the nation’s energy mix, accounting for about 2 per cent of electricity output, the industry’s growth in recent years is casting a shadow over the impending auction of power assets in New South Wales.
Demand for solar power began stirring around eight years ago, when expensive upgrades to the grid jacked up electricity bills while rooftop-panel prices were falling. The market has continued to grow despite easing in late 2010, when the state government started slashing generous subsidies for people who sold solar power back into the grid.
Now, many expect a strong pick-up with the launch of new batteries from Tesla Motors and others capable of storing substantially higher amounts of solar energy for use after sundown — and at prices that are expected to fall more within the reach of ordinary households. Batteries with weaker storage capabilities have been around for some time, but stronger ones have tended to be prohibitively expensive.
“Whether it takes 12 months, two years or five years, I believe battery storage will become viable,” said Matt Vella, managing director of MPV Solar, which turns over $5 million a year installing panels in sun-soaked Sydney suburbs. “When it does, it’ll be as big for the energy market as the shift from the fixed-line telephone to mobile phones.”
New South Wales last week invited first-round bids for a long-term lease of 49 per cent of the government’s power-transmission network…….
The problem for bidders is this: How do you value the poles and wires that crisscross the state if demand for solar panels and storage batteries surges? A recent survey commissioned by Morgan Stanley found 2.4 million households in New South Wales, Victoria, Queensland and South Australia states were willing to spend up to $10,000 each on a solar-panel installation, including the batteries. There were 7.8 million households in Australia in 2006, a total projected to rise to at least 11.4 million by 2031, according to the most recent count by the Australian Bureau of Statistics.
The worry for grid owners is that cheaper storage devices will take more people off their networks more often, forcing a ramp-up in prices to cover costs. And the higher rates go, the more appealing solar panels and other energy-saving gizmos, such as low-voltage lights, look.
“That’s when people start talking about the death spiral,” said Clinton Wood, director of Lighthouse Infrastructure, a Melbourne-based fund manager with investments in solar power.
To be sure, the rooftop solar market has been unstable and influenced by government regulation, even on a continent with the highest amount of solar radiation per square meter. It is also unclear how soon companies such as Tesla can drive the cost of batteries low enough to appeal to a mass market. Tesla’s “power-wall” batteries, which were launched in May and will be available later this year, will sell for as much as $4,500 and need to be integrated with solar panels and other devices. The cost of buying and installing the full package may be $26,000 or more.
The case for solar power is more clear-cut for businesses that use energy during the daytime. Sun Connect, which turns over tens of millions of dollars a year, decided three years ago to focus exclusively on the commercial market. Since then, the company says, revenue has tripled……..http://www.theaustralian.com.au/business/wall-street-journal/solar-boom-raises-doubts-on-power-asset-sale/story-fnay3ubk-1227421384047
Nuclear proponent x-Treasury head Martin Parkinson attacks renewable energy
x-Treasury head Martin Parkinson takes swing at renewable energy target, SMH, June 30, Gareth Hutchens Former Treasury secretary Martin Parkinson has heavily criticised the Abbott government’s renewable energy target and Direct Action policies, saying they will be a far costlier way to reduce greenhouse gas emissions than an emissions trading scheme………
The Senate passed legislation last week to cut Australia’s renewable energy target from 41,000 gigawatt hours of annual renewable energy production by 2020, to 33,000 gigawatt hours.
The Coalition and Labor reached agreement on the issue last month, ending more than 12 months of political deadlock.
Both major parties say the deal will provide certainty for the renewable energy sector, although critics say it will cut investment in renewable energy by about $5 billion.
Economist Warwick McKibbin, from the Australian National University, said the biggest problem with Direct Action is that you cannot use it to build momentum and “scale up” emissions reductions because it is funded via the budget……..http://www.smh.com.au/federal-politics/political-news/extreasury-head-martin-parkinson-takes-swing-at-renewable-energy-target-20150630-gi1npq.html
1 This month
of the week – Disrupting War & Militarism in Oceania. Active solidarity. Radical practice.
Antinuclear 