Australia is expected to spend some $55 billion on new electricity generation over the next decade and a half, but two thirds of this will be in the form of solar technology, and nearly half in rooftop solar PV.
These forecasts are included in Bloomberg New Energy Finance’s Market 2030 outlook, which includes detailed forecasts for Australia and Asia, both of which have major implications for the coal industry – exporters and local generators.
The most striking prediction is that for solar PV, which BNEF says will dominate capacity and investment over the next decade and a half. It expects 15.8GW of rooftop solar to be built in Australia out to 2030 – mostly on the basis of fundamental economics.
It suggests the payback for rooftop solar will halve to just three years by 2030. That is based on no subsidies and no carbon price, but it argues that it is still a compelling proposition to households.
Solar power is coming to the fore as a major future source of global energy, experts say.
In Australia, where there are 1.2 million homes with solar panels installed on roofs, the growth of solar power has been so profound that wholesale prices of electricity have been driven low enough that few coal generators in Australia made a profit last year.
In the state of Queensland this week for several days the price of electricity, normally around $40-$50 a megawatt hour, hovered around zero.
The solar power industry is set to grow even further, with financial predictions from Bloomberg New Energy Finance suggesting that in Australia and Asia the use of rooftop solar panels could rise sixfold over the next decade.
Australian scientists have achieved an important milestone in the solar power industry, by harnessing the sun's energy and creating comparable temperatures and pressures to conventional coal and gas-fired powered stations.
Scientists at a research centre in Newcastle, Australia, used a field of mirrors to catch the sun's rays and reflect them on to a receiving tower. Harnessing the sun's rays in this way creates temperatures up to 570°C, which, when combined with extremely high pressures, produces "supercritical steam", which current solar power plants have been unable to make.
Researchers in the solar power industry said producing supercritical steam from solar power could eventually reverse Australia's reliance on fossil fuels, if the technology can be sustained.
Solar PV module prices in Australia were cut in half over the 2012-2013 period, falling from $1.50/Wp in 2012 to 0.75/Wp in 2013, according to the latest report from the Australian Photovoltaic Institute (APVI).
The report, PV in Australia 2013, also notes that installed prices for small-scale rooftop solar systems dropped by just under 20 per cent – from an average of around $3 to around $2.50/Wp – in a year that saw the largest market for PV installations in Australia since 2009.
“With PV having reached grid parity against retail electricity tariffs in many parts of Australia and government support reducing, the market is stabilising but remaining buoyant,” the report said.
APVI said that continued increases in grid electricity prices mean PV remained a cost-effective option for homeowners across Australia, even without subsidies, and was of increasing interest to the commercial sector.
The report noted that over 1 million Australian homes now had a solar PV system installed, with residential penetration levels averaging 15 per cent nationwide, and over 30 per cent in some areas.
The Australian Solar Council reports Industry Minister Ian Macfarlane has announced the Government’s ‘ preliminary’ position on Australia’s Renewable Energy Target.
The announcement was made at the National Press Club a short time ago.
According to Australian Solar Council CEO John Grimes, the Government’s starting position is:
– slash the Renewable Energy Target to a “real” 20%
– exempting all emissions intensive industries from the RET
– household solar support schemes to remain as is
– an end to 2 yearly reviews of the RET
The hands-off approach to residential solar may be considered by many as a very wise move given the massive support home solar power has in the community. Reducing or abolishing support would likely be remembered by millions of solar voters at the next election. Many of those who already have solar panels installed want others who don’t to have the same opportunity to do so.
However, the show is far from over.
“Of course this is a very positive development, but there is still along way to go and many concerns remain,” said Mr. Grimes. ” There is no detail on this position at this stage, and we do not know what ‘no change to household solar’ means for commercial solar and the threshold between the small and large scale schemes.”
Mr. Grimes also pointed out a “real 20%” would effectively mean a 60% reduction in the Renewable Energy Target and would ” kill large-scale solar in its tracks”. He also recently forewarned that exempting the aluminium industry from the RET would result in a “conga line” of other emissions intensive industries wanting the same deal.
The end of 2 yearly reviews will likely be welcomed by the Clean Energy Council, which expressed its displeasure last night concerning an announcement of yet another RET review now under way; this one by the Climate Change Authority.
Rooftop solar and battery storage will account for more than half of Australia’s electricity needs by 2040, reducing the need for fossil fuel generation, as the share of fossil fuels falls by more than half to around 40 per cent.
Bloomberg New Energy Finance says Australia’s power sector will fundamentally change over the next two decades, as households and businesses turn to rooftop solar and storage and utilities shift to renewables to replace ageing coal and gas plants.
It is part of a massive global shift, with more than $3 trillion being invested in small-scale solar and battery storage worldwide, as the global energy system becomes largely decentralised.
The report predicts more than 50 per cent of Australia’s generating capacity will be located “behind the meter” by 2040, meaning that consumers will become “pro-sumers”, generating and consuming their own electricity. BNEF predicts 37GW of small-scale solar PV – mostly on rooftops – and 33GW of battery storage will be installed by then.
Australia can reduce its greenhouse gas emissions by 50% below 2005 levels by 2030, according to analysis by ClimateWorks.
The federal government is currently considering what Australia’s post-2020 emissions target should be, and is expected to announce its decision in the coming weeks.
Many other countries have already announced their pledges, and various groups in Australia have called on the government to commit to a strong target.
Building on our Pathways to Deep Decarbonisation in 2050 project, our analysis shows that we can strongly reduce emissions using existing technology and while still growing the economy.
Australia’s emissions reduction potential
Australia emitted 535.9 million tonnes of CO2-equivalent in the year to September 2014. Our analysis shows we can reduce emissions to 300 million tonnes by 2030 – the equivalent of a 51% reduction in emissions below 2005 levels.
We have used the year 2005 as a reference level given that it is the baseline year used by the United States and Canada. Australia’s current unconditional target is 5% below 2000 levels by 2020. If we used the year 2000 as a reference, our results are equivalent to a reduction of 46% below 2000 levels by 2030, as emissions were 50 million tonnes higher in 2005 than in 2000.
Many countries have already announced their post 2020 emissions reduction targets. For instance, the US post-2020 target is 26-28% below 2005 levels by 2025. If we convert other targets to 2005 levels by 2025, we find the European Union reduces emissions by 23%, the United Kingdom by 41% and Canada by 24%.
If Australia is to match the United States emissions reduction target in 2025, it would need to be doing over 85% of the proposed abatement actions.
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