Sydney Morning Herald - Nick Bonyhady
The Australian Capital Territory has accomplished an Australian first. Is it now covered in wind farms and solar panels? And are other states following?
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| ACT Minister for Climate Change and Sustainability Shane Rattenbury at Crookwell 2 wind farm. Credit: Sitthixay Ditthavong |
It's the first Australian jurisdiction to legalise medicinal
cannabis, the first to enshrine animals rights such as freedom of
movement in law and now, as of October, it is set to be the first major
place outside Europe to transition to 100 per cent net renewable energy.
Spring has been busy in the Australian Capital Territory.
What
about that 100 per cent renewables gong? It's an impressive statement
at a time when there is still widespread debate about how Australia
should tackle climate change and federal energy policy has produced an
impasse that helped see off Malcolm Turnbull twice as Liberal leader.
But
if it conjures an image of the national capital overrun with solar
panels and a windmill in every back yard, the reality is very different
and much more complex.
So what does "100 per cent net renewables" mean? Will it help fight climate change? And will be all soon be following suit?
What does "100 per cent net renewable energy" mean?
Let's
break it down. The renewable energy part is fairly simple: it refers to
energy that is naturally replenished and does not run out. The 100 per
cent means that there is enough of it to meet Canberra's energy needs.
It's the net where things get complicated.
If it was a gross
target that Canberra had met, it would indeed be running entirely on
energy from wind and solar farms. That would require better transmission
lines to the ACT, more local generation and huge batteries to make up
for varying power output from renewable sources.
By contrast, a net target means the ACT has bought
an amount of renewable energy equal to what it needs from suppliers
around the country but, because the ACT is connected to the national
grid, the energy it actually uses comes from power stations all over the country.
Federal
Energy Minister Angus Taylor, a critic of the ACT's scheme, says "93.6
per cent of the ACT’s electricity comes from the NSW grid, which
continues to be dependent on coal and gas". According to the Department
of the Environment and Energy, "coal and gas account for about 85 per
cent of electricity generation" nationally.
But while the ACT is still powered mostly by coal and gas, the renewable energy it has
bought
is being used in place of coal and gas by consumers in other parts of
the country. In short, the ACT and its suppliers are putting the same
amount of renewable energy into the national grid as the total amount of
energy used in the ACT by homes and businesses.
Shane Rattenbury,
the ACT's minister for climate change, likens what the ACT is doing to
depositing money in a bank and withdrawing it from an ATM. "You don't
receive the same note you deposited but you still have $100," Mr
Rattenbury says.
Where does all that renewable power come from?
The
ACT is known for its national cultural institutions, a man-made lake
and good odds of sighting a prominent politician at the local IGA but
not for generating power. While there are some small solar farms on the
outskirts of Canberra, most of the ACT's renewable power is generated
outside the territory.
There are three ways the ACT has secured renewable power:
- About
77 per cent comes from large-scale contracts the ACT has signed
directly with renewable, primarily wind, producers in Victoria, NSW and
South Australia.
- Another 21 per cent is what the ACT has bought
from renewable energy producers operating within the National Energy
Target, a Commonwealth scheme to encourage the production of more
renewable energy.
- Households in the ACT with rooftop solar contribute the remaining 2 per cent.
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| Source: ACT Government |
Does it matter?
Electricity
accounts for more of Australia's emissions than any other source, at
about a third of the country's total, figures from the federal
Department of the Environment and Energy
show. However, only about 0.2 per cent of national emissions from all sources come from the ACT.
That suggests the ACT's accomplishment will have a minimal impact on national greenhouse gas emissions alone.
But
it is part of a broader story. Hugh Saddler, an honorary associate
professor at the ANU who also works in the renewable sector, says having
guaranteed government demand lets renewable developers access cheap
financing to build more wind and solar farms.
And he says that, with the federal large-scale renewable energy target for 2020
nearing fulfilment, government investment is becoming more important for the sector.
How big a step is this?
The
ACT is not the first state or country to go 100 per cent net renewable.
A report by the Australia Institute, a progressive think tank, notes
that regions in Spain, Austria and Germany have done the same. The rural
German district of Rhein-Hunsrück was the first of the current wave,
in 2012.
Several other countries are also already reliant on
renewable power, including Ethiopia, which uses hydro power, as does
Iceland in conjunction with geothermal power generation.
But
Dan Cass, who wrote the Australia Institute report, says those
countries' transitions "predate climate challenges and recent renewable
development".
The ACT's transition to renewable energy, Mr Rattenbury
says, shows how cities, regions and countries "can roll out renewables
in a cost-effective way … getting the best deal for consumers".
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| Iceland has been running on renewables for years – its water comes out of the ground piping hot. Credit: Alamy |
What difference does it make to Canberrans' hip pockets?
The
ACT government initially estimated that achieving its renewable energy
target would cost households at most $5.50 per week next year before
later declining.
But the actual cost might be different because
the ACT buys most of its renewable power at fixed prices. When the
actual power it uses from the grid is cheaper than the fixed price, it
pays the renewable provider the difference. When the grid power is more
expensive – on a hot summer day, for example – the renewable provider
compensates the ACT.
Associate Professor Bruce Mountain, director
of the Victoria Energy Policy Centre, says he would be unsurprised if
customers in the ACT were currently paying substantially less than $5.50
because market power prices are so high.
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| Hornsdale wind farm in South Australia. |
How did the ACT reach its target?
The
ACT legislated a 100 per cent renewable target in 2016, with the goal
of hitting it by 2020. It then conducted a series of reverse auctions
for renewable power. In a reverse auction, the cheapest bid (in addition
to other criteria) rather than the most expensive, wins.
The last
of the renewable energy supplies contracted under that process, at the
Hornsdale wind farm in South Australia, commences in October, meaning
the ACT will achieve its goal as planned.
Are other states following the ACT's lead?
There
was wide variation in how much renewable energy each state generated
last year, according to a report by the Clean Energy Council, a
renewable energy industry body.
Tasmania produced the most
renewable energy as a share of production and raw amount but NSW
generated the second-highest raw amount, despite being lower in
percentage terms. Associate Professor Mountain says, "Of the new wind
and solar clean energy sources, in absolute amounts, Queensland, NSW and
Victoria will be neck and neck by 2022."
But generation is
different to consumption, which is where the ACT claims its 100 per cent
net renewable crown. On consumption, the states all have different
targets.
- A Tasmanian government spokeswoman says the
state, which has plentiful wind and hydro power, was "on target to
deliver full self-sufficiency in renewables by 2022".
- Queensland has a 50 per cent renewable energy by 2030.
- Victoria
has a 40 per cent target by 2025 but is exploring how to match
Queensland's. It has used reverse auctions similar to those pioneered in
Australia by the ACT.
- A South Australian government spokeswoman says the state intends to be 100 per cent net renewable by "early in the 2030s".
- New
South Wales does not have a renewable energy target but supports the
Commonwealth's target and a net zero emissions target across its economy
by 2050.
- Western Australia also has no renewable energy target
but Energy Minister Bill Johnston says the state's "aspiration is net
zero emissions by 2050".
Spokespeople for the states say
their respective governments are investing in a range of renewable
energy and infrastructure projects.
Net zero emissions take into
account all emissions, rather than only those caused by generating
power, but states with general zero emissions targets will still need to
increase their use of renewable power to meet their targets.
Where is the ACT going from here?
Going
renewable isn't an end in itself. The goal is to reduce emissions
overall and the ACT also has a zero emissions target, set for 2045.
As
the ACT has little agriculture, natural resource refinement or
manufacturing, it is trying to reduce emissions from another source:
natural gas.
The government's plan to phase out natural gas use
has proved controversial, as it will require switching everything from
buses to household heaters and stove tops to electricity.
At the
same time, the ACT's population, and therefore power usage, is growing,
so the government has announced another round of reverse auctions to buy
more renewable power.
How will this affect the grid?
With
blackouts in South Australia and some renewable providers struggling to
find space on transmission lines to get their power to consumers, it is
no secret the Australian electricity grid is struggling.
Associate
Professor Mountain says the grid was built for a period in which "each
state has historically had its fossil-fuel coal basins and most
transmission capacity has been from there."
With renewable energy
spread out around the country, "we need to build infrastructure for
generation that is not where it has historically been," he says.
If
all states were to follow the ACT without improving power
infrastructure, the grid would be unable to cope. The ACT's Shane
Rattenbury says he is aware of the risk.
"We need to build a grid that can cope with the energy of the future not the energy of the past."
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