29/08/2017

Renewable Energy Booming But Could Soon Turn To Bust, Analysts Warn

Fairfax - 

Australia produced enough renewable energy to power 70 per cent of households last financial year, new data shows, but advocates warn the booming industry will flounder unless the Turnbull government commits to a clean energy target.
The government is sharply divided over whether to adopt the target, the central recommendation of Chief Scientist Alan Finkel's review of the national electricity market.
Sunverge chief executive Ken Munson said Australia's high penetration of rooftop solar, where one in five homes use power from the sun, put the country at the forefront of the transforming energy industry. 
New data to be released on Monday shows Australia produced enough renewable energy to power 7.1 million homes, or 70 per cent of households, in the year to June.
This avoided carbon pollution equal to removing 8.1 million cars from the road for a year – more than half the cars in Australia.
Minister for Environment Josh Frydenberg. Photo: Alex Ellinghausen
The data, known as the Renewable Energy Index, was produced by analysts Green Energy Markets and funded by advocacy group GetUp!
It shows renewables comprised 17.2 per cent of electricity generated in Australia's east and west coast main grids last financial year, up from 7 per cent a decade ago.
Green Energy Markets director of analysis and advisory, Tristan Edis, said the industry had recovered from an "investment drought" under former prime minister Tony Abbott, whose government cut the renewable energy target.
Mr Edis said investors had recovered confidence under Prime Minister Malcolm Turnbull but the boom "could soon turn to bust" unless the government adopts a clean energy target, which would provide investment certainty beyond 2020 when the renewable energy target peaks.
Australia produced enough renewable energy to power 70 per cent of households last financial year, new data shows. Photo: Jessica Shapiro
The index showed at the end of June this year, 46 large-scale renewable energy projects were being built. They are expected to create enough construction jobs to employ 8868 people fulltime for a year.
Almost 150,000 small-scale rooftop solar systems were installed during the year to June, which will deliver about $1.6 billion in power bill savings over the next decade, or almost $10,000 per system.
Environment Minister Josh Frydenberg said Australia's energy market was in transition "as we move to a lower-emissions future".
"It is not about stopping the transition or renewables versus fossil fuels, it's about managing the transition to ensure affordable and reliable energy supply," he said.
Mr Frydenberg cited Clean Energy Council figures showing there was a record $8 billion of renewable investment underway, delivering more than 4000MW of new renewable generation capacity.
He has previously said the clean energy target, if implemented, would not come into effect until 2020 so there was "no rush" for the government to make a decision.
GetUp! environmental justice campaign director Miriam Lyons said the new data showed the renewable energy industry was now a "major player".
"It reveals a dramatic shift in public sentiment towards green energy ... [and that] public support for renewables has been resilient in the face of so many political attacks," she said.
The index, to be updated monthly, will track the renewable energy Australia produces, jobs created, pollution reduced and savings on power bills from rooftop solar.

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Supply Crunch Casts Shadow Over Australian Solar Boom

RenewEconomy -

The unexpected boom in China’s solar PV installation this year may have an unfortunate impact on the ambitious plans of many in Australia’s surging solar sector – a bottleneck in module supplies and price rises by the end of the year.
Source: Flickr
The supply crunch has been predicted by market analyst IHS, as part of its forecast for a record 90GW of solar PV to be installed across the world in 2017, with 45GW of this to be installed in China alone.
The size of China’s installations – nearly equivalent to the size of Australia’s entire grid capacity – has taken analysts by surprise, because it was generally assumed that the strong first half installation was due to the expiry of a generous geed-in tariff on July 1.
But the installation rates have continued unabated, with 11.3GW installed in July alone, and IHS says the China demand is consuming a large proportion of the global PV module supply, leading to increased prices and lead times that extend into 2018.
“The latest installation forecast implies that the PV module supply chain is at the very upper end of what it can produce within a year. In reality, the final number of module shipments for 2017 is likely to be limited by the supply of polysilicon.
“As a result of the tight supply, projects are being delayed” and as a result IHS Markit has cut its forecast for installations outside of China in 2017 by 7GW.
Australia, which is experiencing a boom in large-scale solar projects, and in rooftop solar, is also expected to be affected.
“This high China demand has a great impact on pricing and availability in markets sourcing modules from China, such as Australia,” says IHS analyst Josefin Berg.
“Many of the large PV projects secured modules earlier in the year, and may not be impacted. But we do expect some of the large projects that initially were planned for 2017 completion to be pushed into 2018.”
Solar farm developers and contractors confirmed to RenewEconomy that the supply crunch was starting to have an impact. “Absolutely, there is high demand for modules at the moment,” said one. “There is a global shortage, pricing has gone up the past 6 weeks,” said on wholesaler.
According to Reneweconomy’s data, there are more than 2,300MW of large-scale solar plants either under construction or about to build across Australia, and another 12GW of projects in the pipeline – although it seems clear that not all these will be built.
Most solar projects are effectively being built without subsidy, because the off-takers are generally taking the renewable energy certificates that will be generated by the plant.
Only those companies with deep enough pockets to fund the equity component are able to take the “merchant risk” and sell into the wholesale market and benefit from the current high price of LGCs. However, few of these plants are actually under construction.
The competitive nature of the contract market is being exacerbated by the fact that the big retailers are close to filling their legislated mandates, and the corporate PPA market is only just emerging. This is keeping margins fine, and a rise in module prices – even as little as 10 per cent – could have an impact on returns and pricing.
Global module pricing is also being affected by the Suniva trade case in the US, where a tariff on Chinese module imports is being considered.
Solar module prices have rebounded to the mid US40c/watt, a 25 to 30 per cent increase over prices just a few months earlier, which Deutsche Bank says is driven also by stronger global demand, lack of supply chain inventory and supply shut-downs at some Chinese companies that are transitioning standard lines into higher efficiency lines.
“Although China demand is likely to slow down in (the second half), demand is not falling off a cliff and the recently introduced China target suggests that China demand would remain relatively stable in 2018 timeframe while demand in rest of the world continues to grow,” it said in an analysis two weeks ago.
“Across the supply chain, poly, wafer and Taiwanese cell prices have also started increasing over the past few months, reflecting the overall tightness in solar supply chain.”
As an example of how price variations can affect project pipelines, Deutsche says that a tariff of 10c/watt could impact 80 per cent of the pipeline of large-scale solar projects in the US.
In Australia, however, that impact may not be so great because solar is competing against soaring wholesale prices and huge retail prices, meaning that the savings for business consumers in particular remain substantial, once management turns their mind to it.
In recent months, Australian major energy users, like Sun Metals, Telstra, the Whyalla steel plant, Nectar Farms, and numerous smaller businesses are also investing heavily in wind and solar and storage, some up to the level of 100 per cent.
Four of the world’s biggest companies – Apple, Amazon, Google and Facebook, have vowed to source all their electricity needs from renewable energy within a few years, and they have also been joined by the likes of IKEA and brewing giant In-Bev, the owner of Foster’s.
Apple and Foster’s have yet to announce their plans to make their Australian operations 100 per cent renewables, but PPAs for solar plants are expected to feature high in their strategy.
In an earlier report, Deutsche Bank said that the global average unsubsidised levelized cost of delivered solar would be cheaper than coal in more than 50 markets by 2022.
This would represent 5,000GW of available market potential, underlining a point made earlier this week by UNSW solar pioneer Martin Green, who expects prices to fall to $US10/MWh in some parts of the world, with prices in the mid $US20/MWh to be standard elsewhere, pushing the world towards annual installation targets of 1,000GW by the mid 202s, compared to just under 100GW now.

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WA Bathes In Sunshine But The Poorest Households Lack Solar Panels – That Needs To Change

The Conversation - Rebecca Cassells | Alan Duncan | Yashar Tarverdi

Solar panels are still a rarity in WA’s lower-income areas. Orderinchaos/Wikimedia Commons, CC BY-SA
Many Western Australian householders are living in “energy poverty”, according to our new Bankwest Curtin Economics Centre research report, Power to the People: WA’s Energy Future.
Although average household spending on electricity, gas and heating is no more than 4% of income, the figure rises considerably for those on lower incomes. In particular, more than a quarter of single-parent families say they spend more than 10% of their income on energy.
Single parents in particular are far more exposed to energy poverty, a trend that has grown over the past 10 years. Around one in ten of these households spends at least 15% of their income on energy costs. In some cases, this forces them to compromise on other essentials such as food and health care.
Rising energy costs, as well as a personal commitment to reducing greenhouse gases, are motivating many WA households to vote with their feet (or wallets) and adopt rooftop solar photovoltaic (PV) panels at a dramatic rate.
In WA, the installed capacity of rooftop solar PV has grown by 37% in the past 18 months alone. Around 25% of suitable dwellings are now fitted with solar panels. This takes WA to third place among Australian states, behind Queensland (32%) and South Australia (31%).
If this trend continues, the state’s rooftop solar PV capacity is predicted to exceed 2,000 megawatts by 2022. That’s larger than all but one of WA’s power stations.

Generating capacity from WA rooftop solar, 2016 to 2022
Projections are based on predictions from a log linear regression of total MW of rooftop solar PV capacity, and reflect the growth both in the number of installations and the average MW output per solar PV installation. Bankwest Curtin Economics Centre/Clean Energy Regulator
Similar trends are predicted at a national level, with consumer-bought rooftop solar PV expected to account for around 24% of electricity generation by 2040. This is set to make Australia one of the most decentralised electricity networks in the world, with 45% of its total generating capacity coming from “behind the meter”.

Haves and have-nots
Rooftop solar is a popular option, but not all households are able to take advantage of this technology. Our report reveals a clear socioeconomic gradient in household solar installations in WA.
Panels are fitted to only 7.4% of suitable homes in areas in the lowest 10% on socioeconomic indicators. That figure rises to 16% in the next-lowest 10%, and the gap widens still further as income rises. Solar installation rates are around 30% in mid-to-high socioeconomic areas.

Share of suitable WA homes with solar panels, by level of socioeconomic disadvantage
Homes deemed suitable for solar PV include detached, semi-detached or terraced houses, but not strata-titled apartments or units. Bankwest Curtin Economics Centre/Clean Energy Regulator/ABS
Better incentives could boost these numbers, especially in poorer areas. The initial upfront costs deter many homeowners, while most landlords have little financial motivation to install solar on rental properties.
Accessible, secure and affordable energy is essential to any well-functioning economy. And many citizens, communities and governments are acting on the imperative to move to a greener source.
Despite its huge amounts of wind and sunshine, WA lags behind other states both in committing to a clear renewable energy target and in its investment in large-scale renewable power projects.

Renewable projects under construction or at commissioning stage in 2017
Projects at the commissioning phase at the end of 2016 are not included in the total new capacity figure. Investment in the South Australia Hornsdale Wind Farm includes stages 1, 2 and 3. Data for ACT and NT not available; ACT is expected to draw most of its renewable energy from other states and territories. Bankwest Curtin Economics Centre/Clean Energy Council Australia/various other sources
According to our report, WA’s total greenhouse gas emissions in 2015 were 86.5 million tonnes of carbon dioxide equivalent – fourth-ranked behind Queensland, New South Wales and Victoria. This means WA contributed 16.1% of Australia’s national emissions that year.
But while other states and territories have adopted proactive emissions-reduction policies such as state-based renewable energy targets, WA has not yet taken substantial action on this front.
Here’s the likely game-changer: efficient, cost-effective battery storage that can deliver power at the scale required. Storage is set to become vital, both for smoothing out domestic power consumption from solar panels and for large-scale electricity generation. The Finkel Review has recommended that all future renewable energy projects be required to produce “dispatchable” power – that is, be able to store their power and release it at times of higher demand.
Greater efficiency in balancing energy demand over the course of the day, and across large-scale grid systems that feature a range of different weather conditions, is also likely to help overcome the intermittency problems associated with renewable sources.
Australia is on the cusp of an energy revolution, and the pace of change is only going to increase. WA, like every state, needs a clear roadmap to navigate the journey effectively, one that integrates existing and emerging energy technologies and maintains protections for families who cannot currently afford solar panels.
This will give greater certainty to the energy future we can all expect – and, critically, ensure that no one is left behind.

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