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June 19, 2011
Australia has an incredible supply of sunshine, a host of technologies that could meet our needs, and the 5% emissions-cut target that we need to meet. So why, given all the rhetoric about a clean energy future, is Australia's commitment to solar so half-hearted? Why the stop and start state programmes for the small scale, decentralized rooftop solar (PV) for households? Why the failure to shift to large-scale solar to power regional cities?
A concentrating solar power (CSP) plant in Spain that uses panels to reflect light on to a central tower to produce electricity.
What is ignored by those who attack the subsidies for solar power is the current economic subsidies to fossil fuels that amount to at least $10 billion per year nationally. So the issue is not one about government subsidies for the renewable industry versus no subsidies.
Mark Diesendorf, the deputy director, Institute of Environmental Studies at University of New South Wales, says:
There is really only one plausible explanation for Australia’s piecemeal and ineffective set of solar policies: the immense political power of Australia’s big greenhouse polluters.If you want to point a finger, point it at the coal industry.
The choice of new electricity generation technology is not between nuclear and coal, but instead is between nuclear and a combination of energy efficiency and renewable energy, with gas playing a transitional role as back-up. Given its very high capital costs the current economics of nuclear power make it an unattractive option for new generating capacity. Embarking upon a nuclear energy program entails very large economic risks and potential losses of billions of dollars per reactor compared with a mix of energy efficiency, renewable energy and gas.
That leaves renewable energy. Hence the attempts to strangle this new form of energy by the fossil fuel industry---solar is dismissed as cute, niche technology, there is a concerted campaign to scrap the Feed in Tariffs (FITS), and restrict the government funding to large-scale installations.
We shouldn't forget that the rarely acknowledged but irreconcilable conflict of interest when the mining industry on the one hand calls for expanded nuclear power to help reduce greenhouse gas emissions, while on the other hand the same companies producing uranium in Australia are even more rapidly expanding their coal mines in eastern Australia. That is, the two dominant uranium exporters, BHP Billiton from Olympic Dam and Rio Tinto through their majority (~68%) share of Energy Resources of Australia who operate the Ranger mine in the Northern Territory, both earn considerably more profits from coal than they do from uranium exports.
Secondly, the problem is that much of Australia’s, and especially Victoria’s, coal fired capacity is getting old---eg., Hazelwood and Yallourn stations provide 30% of the state’s capacity and are both past or nearing their use-by date. These old stations have essentially been paid for, and are now running on just operation and maintenance costs. If If Australia is to be serious about cutting its greenhouse emissions, then the existing brown-coal-fired power plants such as Hazelwood and Yallourn have to close as soon as possible.
Eventually the old plants like Hazelwood will be retired, new plants (either gas or renewable) will have to be built and financed, and financing costs money. So even without climate change and a carbon tax, as the old plants are retired and new infrastructure is built to replace the old, we will see a substantial increase in electricity prices.
Increased generating and distribution costs are the main drivers, due to an aging fleet of power plants and a change in the demand pattern---the demand is on the hottest summer days, and the increase is mainly due to increased use of air-conditioners. So it makes sense to invest in solar--both small and large scale since what it produces can match increased demand.
Update
The question then becomes: Will the Latrobe Valley necessarily remain an energy hub? Can it survive in a carbon-constrained world? What are the economic alternatives? If carbon capture proves viable 'it could make Gippsland the centre of a major national industry''. It is a big ''if'' and a huge gamble for Gippsland that may not pay off since carbon capture may never be viable. Clean coal will not save the Latrobe Valley.
So how does the Latrobe Valley reinvent itself?
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One of the criticism from the fossil fuel shrills is that the sun doesn't shine at night.
They forget that in hot sunny countries like Australia the peak production coincides almost exactly to peak demand; that solar power can be stored during the day and then used at night in hybrid configuration with gas (or even coal); and that power generated by the fossil fuel industry will continue, though its market share will gradually decline.
The fossil fuel shrills come across as Luddites.