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100%. Transitioning to renewable energy: The South Australian case

The power of renewables and the South Australian example, Independent Australia   12 July 2017 While the Turnbull Government persists in spruiking “clean coal”, renewables continue to be the quiet achievers in energy generationJade Manson reports.

THE FUTURE of Australia’s energy generation has been a topic of impassioned debate in recent years.

This has been spurred on by sharp reductions in the installation price of renewable energy.

Solar and wind energy have now in many cases reached parity with installation prices for coal, and gas and is cheaper in the long-term. In December 2016, the World Economic Forum reported that solar and wind had the same installation price as fossil fuel companies in more than 30 countries. In 2016, clean energy investment grew by almost 50% in Australia. We have reached a tipping point, where investment in renewable energy will continue to rise, while investment in fossil fuels will fall.

Lazard’s energy analysis shows that the levellised cost of energy for wind and solar now outperforms fossil fuel sources of power. Levellised cost represents every cost component – installation, operations and maintenance and fuel costs – divided by the total energy generated during the plant’s lifetime.

Discussions comparing renewable and fossil fuel electricity generation usually centre around the up-front costs and do not consider the generation costs, or the social and environmental consequences of different energy sources. Renewable energy has significantly lower generation costs and does not require continued fuel supply. With installation costs now being similar – and likely to decrease significantly over the next decade – renewable energy is a tremendously worthwhile investment that will break even rapidly and continue to provide returns indefinitely.

This economic competition is making fossil fuel companies nervous and contributing to the heated debate around the issue. Fossil fuel companies still hold a significant amount of power and influence after decades of being at the top of the economic food-chain. Companies such as China National PetroleumSinopec GroupShell Global and ExxonMobil are all in the top ten largest businesses globally, with over $100 billion in annual revenue. These companies are using the wealth they have accumulated since the beginning of the industrial revolution to influence politics and the global market toward their own interests.

This can be seen clearly in the fact that, despite the economic, health and social benefits of renewable energy, those in Parliament continue to support fossil fuel companies……..

Increasing renewable energy investment will also create more jobs and will allow Australians to capitalise on the renewable energy investment boom. While the Coalition declares “coal is good for humanity“, solar jobs are rising and in 2016, made up 665 of open energy job postings. According to Solar Citizensrenewable jobs increased by 34% in the first quarter of 2016. Indeed, data showed that solar positions made up 66% of open energy job postings, against oil with a 21% share and coal with 10%.

Transitioning to renewable energy: The South Australian case

South Australia has sped past its renewable energy target of 50% renewable generation eight years in advance, putting it on track to reach 100% renewable generation by 2030. This should be achieved more easily than in the previous 15 years due to the falling cost of renewable energy.

A deal has recently been made between the South Australian Government and Tesla CEO, Elon Musk, to install the world’s largest battery in South Australia………

Electricity prices in South Australia are very high compared to the Eastern States. The Eastern States are part of a highly interconnected grid, while South Australia only connects to Victoria via two locations. Typically 90% of energy prices in South Australia come down to generation (45%) and distribution (45%). The generation component is made up of several power sources, including gas, diesel and renewable energy sources. These suppliers bid into the market, and the lowest bids are accepted by the Australian Energy Market Operator (AEMO) until demand is reached. When renewable energy is in the mix, the market price for generation is very low.

The distribution component is a duopoly run by the companies ElectraNet (owned by State Grid Corporation of ChinaYTL Corporation Malaysia and Hastings Funds Management) and SAPN (owned by Cheung Kong Infrastructure Holdings Hong Kong). This international ownership of South Australia’s electricity grid has raised security concerns, as these companies may not act in South Australia’s best interests. A bid by Cheung Kong Infrastructure Holdings to buy the NSW electricity grid was knocked back in 2016, on national security grounds.

Due to lack of competition, there is the potential for unnecessary price increases by the power distribution companies. As renewable energy becomes more prevalent, power distribution will make up a larger share of energy costs and these problems will need to be addressed. Renewable energy infrastructure should lead to reduced electricity prices, due to their significantly decreased running costs. If this is not the case, then it calls into question the pricing by the power suppliers and distribution companies. If pricing becomes disproportionate to the service provided, then the government may need to introduce increased regulation or buy back the grid from private distribution companies.

You can follow Jade Manson on Twitter @JadeAlanaMhttps://independentaustralia.net/environment/environment-display/the-power-of-renewables-and-the-south-australian-example,10495

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July 14, 2017 - Posted by | energy, South Australia

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