Sol Energy founder and director Simon McKay, explains why South Australia has a strong clean energy future despite the uncertainty surrounding the Renewable Energy Target (RET).
It’s an exciting time for South Australia (SA), but it’s also an uncertain one. When you read this there could be two outcomes.
The Federal Government may have, despite the backlash, adhered to recommendations of the RET review to reduce the target to a disappointing 15 per cent, or the government may have found a common ground, preferably choosing the RET to remain at 41,000 GWh as per the election promise. (as reported yesterday in CCN the government is seeking to scale back the RET but must win support from Labor and the minor parties).
Either way, it will impact businesses throughout the country, for better or worse. SA is already bucking the trend for renewable energy. Forty per cent of our electricity is gained from renewable sources which increases to 70 per cent on windy days.
In 2011, the state reached its 20 per cent of energy generation from renewables target, with the target to reach 33 per cent by 2020.
SA Premier Jay Weatherill has now suggested the 33 per cent target should reach 50 per cent by 2025.
Going by SA’s track record, this is certainly achievable. What stands in SA’s way is the national RET. This questions if it’s viable for SA to have its own target and if so, what would be its framework within the context of a national energy market?
The debate is exciting for someone like me who is passionate about renewable energy and how Australians can lessen their carbon footprint.
This excitement, however, rapidly dissipates once we talk about the consequences for consumers and businesses, should the RET be repealed. The only winners would be Australia’s large energy providers.
Currently the only argument supporting the government and review panel’s guidance to reduce the RET is how the supposed oversupply of renewable energy may cause the closure of old, inefficient coal generation.
Ironically, this is what the RET was designed to do and it’s working. Australia has the highest carbon intensity of any electricity grid in the developed world and the RET is addressing this, while bringing down costs.
If the RET is repealed, the government will have decided the profits of large energy companies are more important than the rest of Australia’s companies, small businesses and home owners. We will all bear this cost, a cost, which has been approximated at a hefty $10-13 billion.
Increased costs mean Australian businesses will fall behind their offshore competitors. Solar PV generally generates electricity at the times of peak demand, which reduces the wholesale price of electricity. This brings down the cost of electricity for all consumers, not just those with their own renewable generation.
Nearly a quarter of SA homes have installed solar PV, and through utilising solar, SA can remain a leader in renewable energy.
Enhancing Australia’s energy sustainability is everyone’s business and until we have the verdict of the RET review, it’s difficult for businesses to move forward.
*This opinion is published in the November edition of CCN Magazine as part of a solar feature.