Australian news, and some related international items

For Tasmania, Renewables rapidly proving a cheaper option

map-tasmania-wind.1 Renewables rapidly proving a cheaper option JACK GILDING, Mercury

Bloomberg New Energy Finance says renewables are already cheaper than new fossil fuel plants in Australia. The conservative predictions of the Australian Government’s Bureau of Resources and Energy Economics say they will be within a decade.

Of particular interest for Tasmania is the relative costs of electricity from wind and solar. Solar is getting cheaper faster than wind. Again, opinions vary on when the crossover will be. Recent statements by major Australian players suggest it will not be long……

Tasmania rightly prides itself on its potential for renewable energy development, but the unfortunate reality is that no large projects have commenced since the opening of the Musselroe Wind Farm in 2014.

Tasmania may only have a limited time to garner its rightful share of the $280 billion being invested globally in renewable energy each year.

Right now windy Tasmania has an advantage, but as the cost of solar drops, investors will look to sunnier locations.

Private investment in new wind capacity will not just fall into our lap. The State Government controls just about all the levers that determine the viability of energy investment in the state.

 It owns almost all the generation capacity via Hydro Tasmania, the networks via TasNetworks, and almost all retailing via Aurora Energy.

On top of this, the state regulator regulates wholesale and retail electricity prices.

Fortunately, there is a proven solution to this conundrum.

The ACT reverse auction process has shown that an open and competitive process can ensure new electricity supply at the cheapest available price.

In addition, the capital cost and risk is borne by the private developers rather than the taxpayer or the electricity consumer.

In the recent ACT auctions, prices were fixed for 20 years, which provides an additional benefit for consumers in reducing future price rises.

The fact that the Hydro is about to fire up the expensive Tamar Valley gas-fired station despite recent heavy rainfall shows the severity of our energy security shortfall.

We need to use our hydro storages as a big battery to cope with variations in wind and solar, and rely less on rainfall as our only source of energy. We need the jobs and investment that new wind farms could bring.

Gas is clearly not the long-term solution on cost or environmental grounds. Less than a year ago, the Hydro confirmed its “longer-term view” the Tamar Valley unit is “not economically viable”.

Our competitive advantage in wind may not last much longer, and a cost-effective mechanism has been proven. A well-designed reverse auction would also identify niche opportunities where solar may already have advantages over wind in particular locations.

We do not need to wait until the Energy Security Taskforce reports in the middle of next year to know we need to diversify and increase our on-island generation capacity.

The State Government should act now to instigate a reverse auction process to meet our generation shortfall.

Jack Gilding is executive officer of the Tasmanian Renewable Energy Alliance.


October 1, 2016 - Posted by | energy, Tasmania

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