1. Perspectives on Renewable Energy
in Australia and Europe
Michael Williamson,
Principal Strategic Adviser – Sustainable Energy,
Sustainability Victoria

2. Energy revolutions don’t happen very
often.. ……
We may be in the middle of
one!
Australian Institute of Energy 25 March 2010

3. Does energy innovation move in cycles?
1838 – sail and coal power
1800 - sail
WW1 – Royal Navy
switches from coal to
petroleum
2009 – combined wind and
petroleum
Australian Institute of Energy 25 March 2010

4. Renewable Energy Drivers
Take your pick……
> Climate Change
> Energy scarcity (of traditional fossil sources)
> Peak oil (future)
> Nuclear power phase out
> Energy security – risk management
> Balance of trade
> Emergence of new technologies
> Green jobs and green growth
> Politics
Australian Institute of Energy 25 March 2010

5. UK Carbon Trust - Achieving success requires
progress on four different “journeys”
Proof of Proof of Proof of Proof of Proof of Proof of
Technology principle concept viability scalability value quality
journey (Basic (Applied (Early demon- (Full demon- (Marketable (Warranted
research) research) stration) stration) product) product)
+
Grow
1 or 2 Form venture Bring in first Recruit operational 30+
Company individuals (or new unit) outsider specialists staff employees
journey (sweat (Friends & (Angel or seed) (Venture (IPO, (Profit)
equity) family) Capital) revenues)
No Markets Market Field Early adopt- Rational Technology
Market interaction identified trial ers & niches economic & market
purchase evolution
journey (Technology (Indifference) (Recognition) (Benefit
push) quantified) (Market pull) (Feedback)
General General Specific General General
Regulation Regulation Regulation Regulation Regulation Regulation
neutral or neutral positive positive neutral or
journey negative positive
Australian Institute of Energy 25 March 2010

6. EU and Australia - comparison
> 500 million population
> 30% global GDP
> 4.3 m km2
> Kyoto target: - 8%
> 2007 GHG emissions:
5,045 million tonnes
> 22 million population
> 1.3% global GDP
> 7.6 m km2
> Kyoto target: + 8%
> 2007 GHG emissions: 547
million tonnes
Australian Institute of Energy 25 March 2010

7. EU and Australia – total primary energy
1. Oil
2. Gas
3. Coal
4. Nuclear
5. New Renewables
6. Old Hydro
1. Coal
2. Oil
3. Gas
4. Old Hydro
5. New Renewables
Australian Institute of Energy 25 March 2010

8. Australia – a renewable energy policy history
> 1997: Kyoto Commitment 108%
> 1998-2000: $275 million in support
programs
> 2001: Renewable Energy Target (extra
2% by 2010)
> 2004: more R&D and
commercialisation support
> 2008: 2020 unconditional GHG target
of -5%
> 2008: expanded Renewable Energy
Target (20% by 2020)
> 2008: state based solar feed-in tariffs
> 2008-09: Federal $1.35 bn funding for
4 solar power stations, Victorian
funding of $100m
Australian Institute of Energy 25 March 2010

9. EU and Australia – key points of difference
1. Higher abatement target under Kyoto
(-8% for EU15)
2. Policy focus on heat, electricty and
transport fuels
3. Feed-in tariffs to stimulate RE –
technology specific
4. Emissions trading scheme operating
1. Allowed an increase of 8% under
Kyoto
2. Main policy thrust is on the electricty
sector
3. Renewables stimulated by certificate
schemes – technology neutral
4. Emissions trading scheme under
consideration
Australian Institute of Energy 25 March 2010

10. Climate Change - Scientific Context
Global atmospheric concentrations of
carbon dioxide, methane and nitrous
oxide have increased markedly as a
result of human activities. The global
increases in carbon dioxide
concentration are due primarily to
fossil fuel use and land-use change.
– the Inter-Governmental Panel on
Climate Change
Complex non linear physical systems with positive feedback loops
Australian Institute of Energy 25 March 2010

11. Climate Change – Policy Challenge
Climate change is a diabolical
policy problem. It is harder
than any other issue of high
importance that has come
before our polity in living
memory.
Climate change presents a
new kind of challenge. It is
uncertain in its form and
extent… It is insidious rather
than (as yet) directly
confrontational. It is long term
rather than immediate…
(Garnaut Report, page xviii)
Australian Institute of Energy 25 March 2010

12. Can We Understand and Manage Non-
linear Climate Systems?
Humans are ill-equipped to
deal with non-linear
problems
Crossing a flooded river
requires an understanding of
the non-linear relationship
between depth, streamflow,
hydrodynamic force and
overturning moment
- Get it wrong and you drown.
Australian Institute of Energy 25 March 2010

13. Seven issues in the renewable
energy landscape in the coming
decade
Australian Institute of Energy 25 March 2010

14. 1. Peak Oil
‘the point in time
when the
maximum rate of
global petroleum
extraction is
reached, after
which the rate of
production
enters terminal
decline’
Australian Institute of Energy 25 March 2010
Source: www.theoildrum.com

15. 2. Cost of Renewable Energy
Australian Institute of Energy 25 March 2010

16. Cost of New Entrant Power Stations 2009
Ops
$120
Fuel
Victoria wind energy LRMC
$100 Capex
$80
LRMC
$60
$40
$20
$-
Black Coal - dry Brown Coal - wet Large CCGT - Vic Large CCGT -
cooled cooled NSW
Data courtesy SKM 2009,
Analysis includes a carbon price of $10 in 2010 rising to $40 in 2030
Australian Institute of Energy 25 March 2010

17. 3. The Merit Order Effect
> Renewable energy inputs displace the most expensive forms
of generation
> Reduces the pool price of electricty
> 2006 German study predicts this exceeds the benefits paid
by feed-in tariffs* - valued at €5 bn in 2006
> Theory (partly) confirmed by Sustainability Victoria
commissioned 2006 study by McLennan Magasanik
Associates^ into greenhouse gas abatement of wind energy
> What is the value of the merit order effect in Australia? We
don’t know!
• Sensfuss, Ragwiz, Genoese, The Merit Order Effect - http://publica.fraunhofer.de/documents/N-67163.html
•^ www.sustainability.vic.gov.au/resources/documents/Greenhouse_abatement_from_wind_report.pdf
Australian Institute of Energy 25 March 2010

18. 4. Competition from Nuclear as a Zero
Emissions Source
> Nuclear debate revived at the end of the last
decade
> Supporters argue nuclear is a key plank in the
climate change response
> Critics point to waste, safety and proliferation.
> How has technology changed post-Chernobyl,
Three Mile Island?
> 2010 – Obama administration approved loan
guarantee for new US nuclear plant
> Australia – not on the agenda in the next 20
years if ever!
Australian Institute of Energy 25 March 2010

19. 5. Managing the grid and ‘weather
dependent’ renewables
> Existing grid operation built on
dispatchable fossil fuel sources
> Challenge to integrate and
predict wind, solar and wave
energy – a new frontier in
statistical analysis?
> Examples:
– European offshore Super Grid
– Destertec Project
Australian Institute of Energy 25 March 2010

20. Desertec and the Super Grid
Australian Institute of Energy 25 March 2010

21. 6. Politics and Geopolitics
Australian Institute of Energy 25 March 2010

22. 7. International Climate Frameworks,
Science and the IPCC
Australian Institute of Energy 25 March 2010

23. Conclusions
> We are on a 50 year transition to 100% renewable
and low emission energy
> Europe and Australia have both started the
transformation
> Climate change concerns will underpin this
transition in the medium term, but other drivers
may take over
> Energy revolutions are worth waiting for – lets
enjoy this one
Australian Institute of Energy 25 March 2010

24. In Closing….
If nothing else, our success in
developing renewable energy
may play a part in lifting 3
billion people out of
subsistence living.
Australian Institute of Energy 25 March 2010

25. Thank You
Michael.williamson@sustainability.vic.gov.au
Australian Institute of Energy 25 March 2010