Australia holds a promising future for renewable energy. The Government, as well as the people of Australia, are showing keen interest in environmental initiatives.
According to the Green Power report, roughly 877,000 homes and 34,000 businesses voluntarily purchased green power between October and December 2008.
Australia is likely to experience steroidal growth in renewable energy projects. In order to reduce its share of green house gas emissions, Australia is expected to spend billions of dollars on renewable energy projects between 2009 and 2020.
Increased Electricity Demand
The total electricity generation in Australia is comprised of coal at 80%, and natural gas at 12%. Renewable energy accounts for just about 7% of the total electricity generation.
According to the energy industry in Australia, the country’s energy demand is likely to increase by 50% by 2020. This increase is driven largely by manufacturing, mining, transportation and a rising population. To meet this increased demand, about $37 billion will be required as energy investments.
To increase the share of renewable energy in Australia’s electricity supply, the Australian Government created the Mandatory Renewable Energy Target (MRET) in 2001. According to Sean Lucy, head of nabCapital’s Carbon Solutions Group, “The MRET will drive around A$20 billion to A$30 billion, or 11,600 megawatts (MW) of new capacity, between now and 2020.”
The MRET provides Renewable Energy Certificates (REC) to people for installing solar PV systems primarily up to 1.5 KW. The REC program is expected to drive the renewable energy targets. These credits cover the up-front costs. They will be phased out in 2015-16.
The Spanish firm Union Fenosa plans to invest $1.2 billion in the development of seven wind farms in Australia. These wind farms will add 850 MW of generation capacity by 2013.
Barriers to Sustainability Success
There are several hurdles for Australia to reach its 2020 renewable energy target. Some barriers include an indifferent regulatory environment and lack of investment in transmission lines.
According to Jon Dobell of E&Y, “To achieve the 2020 target of 20% (market share), more than half of all new electricity generation capacity installed in Australia until then will need to be renewable, requiring about $23 billion in investment. Only about $3 billion has been invested in the renewable energy sector in Australia since mandatory national targets were first introduced eight years ago so this is a huge increase.”
We will keep you posted on other developments in Australia as they evolve.