Growing a healthy Australian renewables industry

Growing a healthy Australian renewables industry

The preview in today's Fairfax press of the ARENA funding body for renewables is a major win for climate action, because it creates an institution that will support the full potential of solar and wind.
For many years the solar and wind industries have allowed themselves to be given the run around by successive governments. Ministers would 'freeze out' renewables companies that advocated publicly, yet give the coal industry everything it wanted.
Guy Pearce, a former Liberal advisor, blew the whistle on this political corruption, whereby the fossil fuel industry had improper influence over both major parties and the public service.
This brutal energy politics will be in raw view today in Canberra, where the Government is holding an important round table with the solar industry. The round table is part of the Greens' plan to build the power of the renewables industry. It was negotiated as part of the flood levy deal. It will see 200 solar company representatives tell the Government what they need in order to grow a healthy Australian solar industry.
ARENA will have an independent structure and this should give it the ability to work constructively with the solar and wind and other renewable sectors.
The Greens have been able to bring about this coup partly because of their rising political power but also because technological progress is bringing the price of renewables down to the price of coal, around the world and in Australia.
Commentators in the media will want to focus purely on the politics of the ARENA deal, but soon enough it will become clear that there is an underlying technological inevitability at work. It is the failure of Minister Ferguson to accept that inevitability that led to his renewables programs being taken off him by Senator Christine Milne and the Greens.
The US department of energy - hardly a bunch of Greenpeace radicals! - is so confident that solar can be as cheap as coal, without subsidies, that it is funding the development of technologies that can achieve this by 2020.
Minister Ferguson still has the grim view of renewables that he has had for 20 years, telling an industry magazine this year, "I am very firmly of the view that a price on carbon is going to create a huge growth opportunity for gas. It is really the only form of alternative clean energy in Australia at the moment..."
President Obama won over the renewables industry when he chose Dr Stephen Chu, a Nobel Prize winner in Physics, to be his energy secretary. Chu is channelling billions of dollars through the National Renewable Energy Laboratories (NREL), to get solar power cheap within nine years, for all of the US, not just the sunny states of the south west.
According to Chu's NREL, solar PV and solar thermal baseload can be around $100/MWh. This is about the price of coal generation and when solar is that cheap, it will not need any subsidies to beat coal in the energy market.
Unfortunately, Martin Ferguson is so prejudiced against the Greens that he cannot accept they are right about solar. In fact, he is so blinded by ideology that he fails to even hear the solar industry. The best example of this blindness is in the choice of cost projection data used by Ferguson to design solar programs.
While Chu's NREL is predicting solar can get to the magic cost crossover point of about $100/MWh by 2020, Minister Ferguson chooses to instead use data put out by a US electricity industry think tank. This think tank, the Electric Power Research Institute (EPRI) is mostly funded by coal and nuclear firms.
The research director says that solar will not be a cost-effective alternative until after 2050!
Today the solar industry is meeting with the Government and that is a good thing. In fact, the reason the meeting is being held is that it was a condition the Greens demanded in return for passing PM Julia Gillard's flood levy package.
Solar PV and solar thermal companies feel betrayed by Ferguson for his lack of faith in their technologies. The background paper which frames the round table today uses the EPRI figures for solar cost performance. These predict that solar will cost something like $200-$600/MWh in 2020.
This negativity towards renewable energy pollutes the whole of energy policy in Australia. Take the Solar Flagships announced last month. The Moree Solar Farm and Kogan Creek Solar Thermal Project are fantastic initiatives, which should build solar plants as big as power stations. I have great confidence in the people who won the bids, but it is a risky adventure.
Our solar industry has built 1MWh plants and is now being told to build 250MWh plants. Why such a big jump? Isn't that an invitation to fail?
Industry and academic experts have told the Government repeatedly that they prefer a sensible pathway of growth, from a few small-medium plants of 1-10MWh in PV and 20-50MWh, across a range of technologies. Then a few in the large-medium scale of 30-50MWh PV and some 100MWh+ solar thermal. Then the industry will have the skills and confidence to build the large-scale plants of 250MWh+, like the advanced industries in other countries.
The electoral benefit of this approach is that the projects would be sited around the country, with many electorates benefiting from the emergence of the solar sector. This will build the momentum of the renewable energy revolution and protect it from the Greenhouse Mafia.