Facing the industry’s challenges

Q: What are the main challenges facing the clean energy industry? How can they be addressed and/or overcome?

A: To keep climate change at bay while ensuring our economy grows – we need to meet new and rising demand for energy with clean sources. The Clean Energy Council is focussing primarily on the development and implementation of robust, long-term macro policy framework that encourages the uptake and development of renewable energy and energy efficiency throughout the nation.

The introduction of an Australian emissions trading scheme, renewable energy and energy efficiency targets will change the face of the energy industry as we know it. As such, we will be looking to ensure a smooth transition for the nation to evolve to a low carbon, sustainable economy.

The Council is also focussed on helping members optimise business opportunities that are springing up locally and overseas. We have already seen an enormous industry turnaround in under 12 months as Australian companies tool up to take up the challenge at home and abroad.

Q: Many analysts in the industry have claimed that there is a market failure when it comes to financing clean energy projects. What role do you think the government and private sector have in remedying that failure?

A: The private sector is and will be the primary financiers of Australia’s shift to a clean energy economy. However to secure private sector investment in these long-term infrastructure projects – that may run into the hundreds of millions of dollars and last several decades – requires a level of certainty that will be delivered through sound, comprehensive climate change and energy policy. There is a need to guarantee a growing market for renewable sources, this will allow clean energy to compete and stimulate investment.

There is clearly a market failure in taking the cost of carbon emissions into account in respect to the damage it causes to our environment through climate specifically. Without a cost on carbon, we will not reach price parity with high-emission energy sources and the clean energy industry will always be playing a game of catch up.

Policies such as emissions trading along with complementary measures, such as renewable energy targets and energy efficiency targets, are essential to provide a level playing field for clean energy in the energy market, facilitate business growth and the large-scale deployment of renewable energy infrastructure, thereby reducing Australia’s greenhouse gas emissions.

Australian business is already investing in Australia’s sustainable future and we are looking to the government to lead the transition the nation’s dependence from carbon intensive power sources to clean energy.

The place of emerging technologies in Australia’s clean energy future

Q: What role do you think emerging technologies, such as geothermal power, have in Australia’s clean energy future?

A: As the national peak representing the sector in Australia, the Council welcomes the opportunity to consider and discuss any potential clean energy source. There are a number of promising emerging technologies, of which, carbon capture and storage is just one and geothermal is most definitely another. Both have the potential to contribute to Australia’s growing energy demand and justify research and development support.

Australia has a natural abundance of hot radiogenic granites (hot rocks) used to produce geothermal energy and once fully established, geothermal energy will produce electricity that is controllable and predictable. However, as an emerging technology, geothermal requires more funding towards research and development, in order to take advantage of this zero-emission electricity source. At a state level, there is much support toward the research and development of geothermal as an emerging technology. The Federal Government acknowledged this need and recently announced $50 million worth of funding for an essential geothermal drilling program.

The Clean Energy Council sees geothermal working alongside other renewable energy sources, such as hydro, bioenergy, solar and wind, to provide Australia with a diverse, secure suite of clean energy sources. The Council is working with industry and government to secure further substantial investment into Australia’s cleaner future, including research and development of geothermal energy in Australia.

Q: You mentioned carbon capture and storage as an emerging technology. What role does that have in Australia’s clean energy future?

A: We know that there is no single answer to the climate change problem so it is clear that all proven and developmental clean energy technologies will have to play a part in the transition to a low carbon economy. However, Australia needs to first focus on securing a market for proven clean energy, in line with the announced renewable energy target of 20 per cent by 2020. We have proven, technologies, such as wind, bioenergy and solar, ready right now to deliver carbon free energy and meet Australia’s energy demands.

On targets and trading, challenges and opportunities

Q: The Clean Energy Council supports the Federal Government’s renewable energy target of 20 per cent by 2020. Is the government’s plan to phase out MRET as the emissions trading scheme matures the right way forward?

A: Once again, this is about market failure to cost emissions in the price of stationary energy. A designated market for clean energy is an essential complement to an effective emissions trading scheme. Australia’s clean energy industry is ready right now to step up and meet the target and substantially reduce our greenhouse gas emissions; but we need a guaranteed market to drive the billion dollar levels of investment, creating investor certainty. A renewable energy target is the proven, best way to provide both investor certainty and a competitive market for clean energy – ensuring immediate deployment and a sustainable, cost-effective climate change strategy for the long term.

The government has continued to support renewable energy targets since Prime Minister Rudd formally announced the policy during the UNFCC talks in Bali last year. We will continue to work closely with the Commonwealth to deliver this policy. Once the price of carbon is fully taken into account for fossil fuelled energy, we expect at least price parity with the cost of clean energy; but this may take years or decades via an emissions scheme alone. Climate change is an urgent issue right now and our demand for energy is only increasing. Emissions trading alone will not provide deep enough cuts in the short-term that are needed based on the latest scientific assessments of climate change.

Q: What are the key components of a robust national emissions trading scheme?

A: The Council has made a detailed submission to Professor Garnaut’s ETS review, which has called for the early introduction of an Australian emissions trading scheme to provide business certainty as well as transitional support to industries.

The Council believes that an ETS design will only result in significant reductions to meet Australia’s Kyoto and internal targets with a framework of complementary measures including the announced renewable energy target, defined energy efficiency targets, removal of market and systemic barriers and a funding stream to support the rapid commercialisation of new clean technologies. For a full copy of the Council’s ETS review submission, please visit www.cleanenergycouncil.org.au or www.garnautreview.org.au

Q: What are the greatest opportunities for the industry in the near term?

A: The renewable energy industry in Australia is undergoing a dramatic transformation due to renewed government support, industry and consumer investment. The industry is facing a fantastic opportunity for growth in order to compete and supersede more carbon intensive energy options, such as fossil fuels.

We have proven technologies and the knowledge to right now meet our growing energy demand and evolve to a clean-powered, sustainable economy and I’m excited by the future we can help create in doing so.