Australia turns to sun, wind and waves for clean energy

* Australia races to capitalise on clean energy sources
* Need to decide carbon price key to plan's success
* Cheap conventional energy may stymie renewable ambitions
Michael Perry Reuters Alernet 22 Aug 10;

SYDNEY, Aug 22 (Reuters) - Australia plans to build the southern hemisphere's biggest wind farm by 2013 as it scrambles to harness its abundance of clean energy sources, such as wind, solar, waves, geothermal and bioenergy, and fight climate change.

Renewable energy now supplies just 6 percent of power in Australia, because it has historically lacked the political and commercial will to pursue big renewable energy projects.

The very sources of its clean energy, its vast outback and 59,736 kms (37,120 miles) of coast, are major obstacles to linking new, remote power sources into the power grid.

Australia's problem is that it has too many energy resources, crucially too much cheap coal, making it the world's largest coal exporter and generating about 80 percent of its electricity through coal-fired power stations.

"It's a blessing and a curse," said Matthew Warren, head of the Clean Energy Council, which represents more than 350 companies in the renewable energy and energy efficiency fields.

"Australia is really at the top of the list, in the scale of the economy and the quality and scale of renewable resources. But the grid issues are significant because we run a very, very large, long and thin grid," said Warren.

"It's like running a grid from Paris to Moscow with sparsely distributed energy demand through that grid," he said.

But Australia has begun to tackle the problem.

Revised renewable energy target laws passed in June promise some A$20 billion of investment in clean energy technologies by 2020, creating an estimated 28,000 new jobs.

On Aug. 12, Australia's largest energy retailer AGL Energy Ltd and New Zealand's state-owned Meridan Energy Ltd announced they would build a A$1 billion wind farm in Macarthur, Victoria. Its 140 wind turbines would make it the largest wind farm in the southern hemisphere, generating enough power for 220,000 homes, abating 1.7 million tonnes of greenhouse gases annually or the equivalent of taking 420,000 cars off the road.

Wind generation is cheaper than other forms of renewable energy destined to feed a grid, says Meridan chief Tim Lusk.

"We expect wind farms, and Macarthur, in particular, to make a substantial contribution to Australian (power) retailers meeting commitments under the Renewable Energy Target."

LACK OF CARBON PRICE MAY HINDER CLEAN ENERGY

Australia has set itself a 20 percent renewable energy target by 2020 which the Clean Energy Council believes will be met, despite the lack of a carbon price.

In campaigning for an Aug. 21 election, the Labor government and the conservative opposition are divided over a carbon price, which would force coal power operators to invest in cleaner technology and make renewable energy more competitive.

The lack of a price on carbon could cost the Australian economy and consumers an extra A$2 billion ($1.75 billion) by 2020 due to investment in less energy efficient coal-fired power plants, the Climate Institute think-tank estimates.

"It would be better in the long run if we had a carbon price," said Warren of the Clean Energy Council. "It's the economic tool of choice (to develop clean energy) because it's seen as being the most efficient and most effective.

"Once introduced it creates a core signal to business to change their investment patterns. Without it we are in a second best market. We encourage a more co-operative approach to a carbon scheme as quickly as possible."

But the bipartisan agreement that drove through June's renewable laws does not exist for carbon.

To get the legislation past a hostile upper house Senate, Australia was forced to separate its renewable energy plans from its carbon trading scheme, just as U.S. President Barack Obama was forced to cleave his clean energy initiatives from sweeping climate change legislation to appease Congress.

Prime Minister Julia Gillard says she is still in favour of a market-based carbon scheme to tackle climate change, but has deferred a decision until 2012, while opposition leader Tony Abbott is opposed to a carbon price.

NO ENERGY SECURITY RISK FOR AUSTRALIA

Renewable energy investment worldwide has boomed in recent years, with some US$190 billion worth of new clean energy in 2008, according to the 2009 Renewables Global Status Report.

Large-scale solar plants have tripled from 2007 to total 1,800 in 2008, with the majority of new plants in Spain, the Czech Republic, France, Germany, Italy, Korea and Portugal. The United States, the world's biggest wind energy generator, in 2008 installed five times Australia's total wind energy capacity.

In contrast, the Snowy Hydro Ltd complex in Australia's southeast, which consists of 16 dams and seven power stations and which contributes 77 percent of current renewable energy, was built back in the 1950s primarily as a symbol of nation building.

"We do not have energy security issues like the Europeans or even the U.S.," said Warren, referring to Russia cutting off gas to Europe and Washington's push to reduce its Middle East oil.

"That has made it far more attractive (for Europe and the U.S.) to take a more aggressive approach to renewable energy."

Australia did have an opportunity in the 1980s and 1990s to develop large scale renewable energy, but let it slip.

Australian scientists were in the vanguard of renewable energy technology, most notably Shi Zhengrong, who became known as the "Sun King", after leaving Australia to produce solar cells in China.

Shi's Suntech Power Holdings Co is now China's largest photovoltaic (PV) solar panel maker.

While Australia's scientists still work at the cutting edge of renewable technology there has remained an absence of market drivers to expand the country's renewable industry, said Iain MacGill, from the Centre for Energy and Environmental Markets at the University of New South Wales.

"We did have early leads, we were one of the world's larger PV manufacturers and deployers back in the 80s," said MacGill.

"The competition steepened, and it would have taken significant investment and risk to have stayed in the game. But we withdrew from the race and that's a shame."

Still, Australia could switch completely to renewable energy within 10 years by building 12 huge solar thermal power stations and 23 large-scale wind farms, under a "Zero Carbon Australia Stationary Energy Plan" released in August.

The solar plants would generate 60 percent of the nation's power using Australian technology to store heat in molten salt, which allows them to operate 24 hours a day. The rest would come from 6,500 wind turbines dotted mainly around the coast.

The network would generate 325 TWh of power a year, said the plan produced by Melbourne University, Beyond Zero Emissions environment group and Sinclair Knight Merz engineers.

This ambitious clean energy network is not cheap, costing A$370 billion over the 10 years of the plan. But the plan says the extra power cost to households could be a mere A$8 a week.

"Our long-term global goal is to very substantially reduce our emissions, a goal that will require almost all of our stationary (fossil-fuel) energy to be produced from zero or near-zero emission sources. This report demonstrates we could already be technologically ready to do that," said former Australian environment minister Malcolm Turnbull.

For details of the plan: http://media.beyondzeroemissions.org

SOLAR POWER BARELY TAPPED

Australia, one of the world's highest carbon emitters per head, will be forced to decarbonise its economy as the world tackles climate change and eventually sets a price on carbon.

The new Large-scale Renewable Energy Target (LRET) laws will spur early development of clean energy, initially in the wind sector, analysts say. Wind now provides 16 percent of Australia's renewable energy.

"Wind power will produce 50-80 percent of the renewable energy certificates required under the LRET," said Jenny Cosgrove at Wilson HTM Investment Group.

Wilson HTM lists more than 70 wind farm projects with a total capacity of 11,000 MW on the planning boards and expects wind farm growth to average 16 percent a year.

Austalia has the highest average solar radiation of any continent, yet it has barely tapped into solar power, with its largest solar thermal plant producing only 1.5 MW of power.

The government's A$1.5-billion Solar Flagship Programme aims to develop the sector by help funding building and development of large 1,000-MW solar power stations. It has also pledged A$100 million in renewable energy venture capital.

The small Greens party, which is expected to control the balance of power in the Senate after the election, has proposed A$5 billion worth of loan guarantees and a feed-in tariff for large-scale renewable energy developments, similar to the U.S. model which provides a 100 percent guarantee.

"In the context of the global financial crisis, loan guarantees are essential to help renewable energy developers access the finance they need to build baseload power stations," said Greens Senator Christine Milne. (Editing by Clarence Fernandez)