Monday, February 2, 2009

Heat is on backward government energy policies

The Age, Editorial
February 2, 2009

We should use the sun's power to stop blackouts, instead of causing them.

THE sun's energy has seldom made itself felt so fiercely as in the past week. Anyone who stepped outside immediately felt the intense heat and light, with a total energy far beyond anything generated in our power stations. The week brought home the burning irony of our predicament: at the very time air-conditioner use drove peak electricity demand to record levels, the matching solar energy peak was almost entirely untapped. As a result, the electricity grid could not meet demand and tens of thousands of homes suffered power cuts.

All this coincided with a series of Age reports that spelt out the costly consequences of decades of government neglect of solar power, a field in which Australia once led the world. Our researchers have made their mark, but mostly in places such as Germany, Spain, Japan and California (where a $3 billion program aims to cover 1 million roofs with solar panels). Factories and supermarkets are turning over their vast roof spaces to photovoltaic panels that provide clean, reliable, fixed-price electricity for a generation to come. Government policies have driven rapid growth in solar industries — global uptake has grown at 30-50 per cent a year for a decade. Billions of dollars have been invested, with hundreds of manufacturing facilities set up, creating hundreds of thousands of jobs and turnover of more than $30 billion a year. With the economies of scale created by such growth, some places are eyeing grid parity — the point at which the solar price equals the grid electricity price — within years.

Meanwhile, back in sunny Australia, which has more consistently usable radiation than most other countries, solar power has almost stood still. While Germany was adding 1300 megawatts of solar power a year by 2007, Australia managed just 10 megawatts. The German industry employs 57,000 people; Australia's only 3500. The only local maker of photovoltaic panels will shut down in April, a victim of government policies, tariffs and institutional structures that effectively protect traditional generators. As The Age reports, several European companies considered investing in Australia but went elsewhere, citing policies and markets that still favour fossil fuel sources.

The Rudd Government's renewable energy policies represent some advance on its predecessor's, but its reductions of solar rebates (restricted to households, which use about a quarter of the nation's electricity), and limits on the output of eligible systems are hardly the stuff of an energy revolution. And that is what is needed in a carbon-constrained world of climate change.

Power companies make money selling energy, not saving it, and governments have largely left the urgent business of smart, renewable energy use to individuals. Victoria shares the Commonwealth's reluctance to embrace the tariff model calculated on gross feed-in to the grid, one adopted by more than 40 countries as recommended by the International Energy Agency. As The Age reported, a memo to cabinet warned that the limited system adopted in Victoria would not increase the uptake of solar panels. The effect is to protect coal-fired generators, which leads one to wonder about the Government's agenda and any undisclosed contractual obligations to the privatised industry's operators.

The Department of Sustainability and Environment memo put the cost of its model — covering households, businesses, farms and community groups to "create a thriving solar industry" — at $18 a year per household. One can be confident most Victorians would be happy to pay that to secure power supplies and cut greenhouse gas emissions. Other benefits of the proposal included solar investment worth $2.5 billion and 2500 new jobs. (That is roughly on a par with the Latrobe Valley power industry workforce, which has fallen from 8500 in 1990.) Energy Minister Peter Batchelor has yet to explain the costings he cited to reject the gross feed-in model. These costings almost certainly do not include the multibillion-dollar capital investment in conventional generation (plus costs of increased water use) needed to meet predicted demand growth of 20 per cent in a decade.

To secure the energy and jobs of a sustainable future, Australian governments must do better than their reactionary, crisis-driven policies to date. Vowing to "harness the sun and the winds and the soil to fuel our cars and run our factories", US President Barack Obama has earmarked a big part of his economic stimulus package for developing clean energy. In these times of heatwave and drought, Australians also need leaders with the courage and vision to transform our energy sources and use.

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