Uptake of renewable energy in Australia

In Chapter 2,an in-depth analysis of sustainable energy technologies is provided. Here a simple analysis of the current uptake of renewable energy in Australia is offered. A mix of renewable energy technologies is expected to be developed to meet the Mandatory Renewable Energy Target of sourcing 2% more electricity from renewable sources by 2010 (the Mandatory Renewable Energy Target (MRET)), as prescribed by the Renewable Energy (Electricity) Act 2000 (Cth).3 Prior to the enactment of this legislation, Australia's renewable energy sector generated approximately 16,000GWh of electricity representing 10.5% of Australia's electricity market. This was largely electricity generated from hydroelectric sources from Tasmania and the Snowy Mountains scheme. In order to meet the MRET, renewable energy generation from minor sources of energy,

2 Most of the information given in this section is sourced from Renewable Opportunities - A Review of the Operation of the Renewable Energy (Electricity) Act 2000, especially the section entitled 'Progress Towards MRET Objectives', available at <http://www.mretreview.gov.au/report/index.html< (accessed 23 August 2005).

3 See Chapter 4.

other than hydro, will need to increase about 60% above 1997 levels to a point where 9500GWh of renewable energy is generated.

The mix of renewable energy technologies, as at 18 August 2003, is the following: hydro - 36%; solar hot water heaters - 26%; wind - 11%; bagasse cogeneration - 10%; landfill gas - 8%; wood waste - 4%; black liquor - 4%; and sewage gas -1%. These figures demonstrate that a wide range of renewable energy technologies have entered the electricity market since the introduction of the MRET. For example, largely due to the MRET, the solar hot water system has grown by 30% per annum from 19 000 to 30 000 systems. The wind industry reported an annual growth rate of 118% between 1999 and 2002. Wind power is expected to grow 16% a year from a small base over the entire outlook period and to contribute around 36% to the additional renewable energy generated between 2001-02 and 2010-11. Electricity generated frombiomass is expected to increase by 10% per year, accounting for 33% of the total growth over the same period.

Sales of renewable electricity, equipment and services for 2002-03 were approximately $1.8 billion, of which 14.5% are expected to be exports, amounting to $226.5 million. These sales are less than half of the Renewable Energy Action Agenda target (discussed below) of $4 billion sales in 2010. Projected employment is 6189 people. Installed capacity for this period was 7616.4MW which, when large hydro generation is removed, amounts to 680MW.

By September 2003, it was suggested that $900 million of investment in renewable energy projects had occurred with another $1 billion committed or planned. However, a number of investors are concerned that investment will cease after 2007 because the capacity to deliver the 2010 MRET target will have already been installed. Also there is no commitment on the part of the Australian government to continue the target beyond 2010. This reduces the payback period for investments, which is typically 15 years.

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