Australia: Renewing Interest in Renewables
Published: Friday, 2 November
2001
By K.Ravi
 |
Hydropower
is the primary renewable technology in Australia
Though Australia is relatively well endowed with
renewable energy sources such as wind, solar, hydro
and biomass, the share of renewable in the country's
total power generation is just 10.5 percent, with
large scale developments limited to hydroelectric
and biomass. Remoteness of certain electricity markets
(Tasmania and Northern Territory) and abundant availability
of sources (water and Bagasse) has been the traditional
drivers for the renewable industry.
Frost & Sullivan's extensive Renewables
Portfolio analysing European, Latin and North
American markets is briefly extended in this short
article to Australia.
Legislation becomes a cornerstone for market
growth
The Renewable Energy (Electricity) Act, 2000
and Renewable Energy (Electricity) Regulations
2001, introduced by the Commonwealth Government
is expected to have wide spread ramifications
for the electricity market in general and grid
based renewable industry in particular. This legislation
requires generation of 9,500 GWhr of extra renewable
energy per year by 2010 (see table for interim
year wise targets), and also place a legal liability
on wholesale purchasers of electricity to source
an additional 2% of power from renewable energy.
What are its implications for the renewable industry
and what are the technologies that are likely
to benefit?
The suppliers of equipment for industrial scale
renewable energy plants are expected to benefit
the most from this regulation. The key driver
will be the establishment of the Office of Renewable
Energy Regulator (ORER) with powers to implement
the mandatory regulation.
Australia: Mandatory Renewable Energy Target
|
Year
|
Required
additional power
GWh
|
|
2001
|
300
|
|
2002
|
1100
|
|
2003
|
1800
|
|
2004
|
2600
|
|
2005
|
3400
|
|
2006
|
4500
|
|
2007
|
5600
|
|
2008
|
6800
|
|
2009
|
8100
|
|
2010-2020
|
9500
|
Source: Office of the
Renewable Energy Regulator, Australia
While the large hydro and biomass markets are
in the advanced stage of maturity, deregulation
of the electricity market is impacting its further
development. The bagasse based cogeneration plants,
which were traditionally owned, and operated by
the sugar plants themselves are seeing the entry
of Independent Power Producers (IPP). This has
thrown up opportunities for market growth and
also for development of new technologies such
as gasification, anaerobic digestion and co-firing
at coal power plants.
Mini hydroelectric plants and wind turbines are
the technologies with higher growth potential.
Here again IPPs are expected to drive the requirement
of mini hydroelectric plants, with the supplies
mostly met indigenously.
With both the utilities and IPPs actively pursuing
wind energy projects, it provides immense opportunities
for overseas
 |
Up to $10
bn in a decade
suppliers, especially because of the nascent state
of the domestic wind turbine industry. While Pacific
Hydro has put up a 18 MW capacity wind farm in Victoria,
Western Power is commissioning $45 million, 22MW
wind farm in Western Australia. Companies like Sulzon,
NEG Micon, Nordex and Vestas are the major competitors
in this fledgling market. Estimates suggest that
nearly $10 billion needs to be invested over the
next decade in giant wind farms, if Australia is
to have a right mix of renewable and also meet the
greenhouse emission targets.
While Australia is one of the world leaders in
solar photovoltaic technology, costs have been
restricting its large-scale use for power generation.
However, the new renewable energy act should help
further research for arriving at commercially
viable solutions.
Other technologies like landfill gas, tidal,
and geothermal are likely to be developed on specific
opportunities, rather than on wider commercial
scale.
However, abundant availability of cheap black
coal, brown coal, and natural gas, is a major
restraint for the development of large-scale renewable
energy in Australia, beyond the mandatory limits.
But Government subsidies for renewable technologies
to meet the 2% target in itself are expected to
lead to maturity of the renewable technologies.
This will in turn bring down the equipment costs
and hence help renewable compete with other conventional
technologies.
Domestic applications
 |
Solar Power
diminishing
Despite the Government's high profile legislation
on aggressively pushing the renewable among industries,
Australian Bureau of Statistics has indicated recently
that the use of renewable, especially solar power
for domestic purposes has actually declined. One
of the main reasons could be due to the expansion
of grid and availability of grid power to larger
segment of the population. Various green groups
and building advisory associations have awaken to
this reality and are in fact pressing the Government
to offer its home grant for builders of first new
homes, only on the basis of energy efficiency and
use of renewable sources. If accepted, this factor
will also be one of the major drivers for further
growth of renewable and in this case domestic solar
photovoltaic industry.
Conclusion
Even though regulation is proving to be a common
driver for all the renewable technologies, the
level of deployment and hence the market growth
would depend on various other factors like maturity
of the technology, time required for project completion,
cost, greater level of domestic components etc.
Moreover, with the introduction of competition
in electricity market, the operational and generation
costs have assumed greater significance. Those
technologies and suppliers that satisfy these
criteria are expected to benefit in the near future.
In the longer run however, resources spent on
development and commercialisation of new technologies
would pay off.
Frost & Sullivan is currently researching
on a new European Renewables Market Report due
for publication in January 2001. It will analyse
each major technology segment allowing comparison
to our current Renewable Energy Market reports
on North
America and Latin
America.