It’s not news that our government is lagging behind on renewables. We still don’t have a Renewable Energy Target for beyond 2020. We’ve had Coalition MPs pissing away money on “clean coal” research. The Coalition (along with Queensland Labor) has done legislative somersaults to prop up the Carmichael-Adani coal mine. Today, they rejected a Clean Energy Target recommended by Australia’s chief scientist.
But what is relatively new information is — even ignoring the environmental reasons for going green (which, at this point, we really, reeeally shouldn’t be doing!!) — renewable technology just makes economic sense.
Subsidies have officially started paying for themselves in terms of health and environmental benefits, building solar and wind power is simply now more cost-effective than new fossil fuel plants and, with the first Renewable Energy Index showing that Australia produced enough electricity from renewables in 2016-17 to power 70 percent of homes, we know that capacity is catching up.
Basically, by refusing to play ball, the Australian government is costing us goddamn money.
Case in point? Just a little state in the good old US of A that’s simultaneously grown its population and economy while reducing C02 emissions. A state that, by itself, has both the world’s sixth largest GDP and a holy grail of mature, bipartisan climate policies. You know, the one that elected the Terminator as Governor.
California, here we come.
Down Under vs The Golden State
It’s impossible to overstate just how far ahead California is in the transition to a green economy.
Renewables currently make up 28 percent of its electricity generation, not including large hydro at 12 percent (while zero emissions, large hydro isn’t counted as environmentally “sustainable” in parts of the US; it’s a whole thing). Meanwhile, Australia is middling around at 9 percent and 7 percent respectively. California is on track to bump renewables up to 50 percent by 2030 and, as of July this year, an historic 100 percent by 2045. Australia, on the other hand, has the relatively piss-weak target of 23.5 percent by 2020 and an ongoing debate about what to do after that.
Even accounting for California’s larger economy and higher, if more condensed population, it’s baffling that Australia is this far behind. We’re both first-world economies, we both have excellent renewable energy resources, and we both have phenomenal technical expertise and skilled workforces.
The reason for California’s massive difference in development? Stable policies and politicians.
Yes, really.
“California has set targets across a range of areas; renewable energy targets, greenhouse gas emission targets, electric vehicles, energy efficiency,” Climate Council energy expert and engineer Petra Stock says. “But more so than those specific targets, what’s been critical has been the policy stability over a long period of time. So that businesses know when they come to California that the same rules are going to apply into the future.”
Anyone familiar with Australia’s historic disabling of the carbon tax, reduction of the Renewable Energy Target, and failed attempts to shut down economically successful clean energy investment initiatives can see why clean energy investment stalled in this country.
When the carbon tax was removed in 2014, renewable jobs plummeted. While we’re definitely recovering post-Abbott, energy companies are still advocating for an emissions trading scheme and — no matter how much money Turnbull and co. would like to pretend otherwise — they’re increasingly set on shutting down ageing, expensive, and unreliable coal-power plants.
“The political process has really cost Australia.”
“That whole process has really cost Australia,” Stock says of Abbott’s time in power. “Over that period, investment dropped substantially, and there was a huge decline in jobs, almost one in four [clean energy] jobs were lost over that period.”
“But I think we’re starting to see Australia come out of that period now, and there’s a number of projects that are under construction this year, so if we can keep the policy environment stable and not scare off business and investment, then we’ll start to see some of that growth here.”
California, meanwhile, has enjoyed decades of smooth, bipartisan clean energy policies at the state level. “Here in California we have a long history of taking our energy future into our hands,”, California’s Energy Commissioner Karen Douglas says.
“Even if you look back to the early 1970s, and the Arab oil embargo, our power plants were fuelled by petroleum, and it was the state that looked at this and said ‘well this is clearly not a good idea,’ and the state made a decision to transition to other fuels.”
California’s key policy makers go back to basics.
California’s signature cap-and-trade policy, the California Global Warming Solutions Act, was introduced by Republican (!) Governor Arnold Schwarzenegger (!!) in 2006. It effectively mandates utilities and manufacturer’s cap their emissions, buy extra credits to emit more, or sell credits when they do not.
Accompanied by the CEC’s current Renewable Energy Portfolio (RPS) of 50 percent by 2030, cap-and-trade directly has resulted in half of all US clean energy investments from venture capitalists. Arnie’s policy was extended until 2030 by current Democrat Governor Jerry Brown last July.
Other kickass policies include a pledge to have 1 million zero emissions electric vehicles on the road by 2020, and introducing power purchase agreements (PPAs). These allow Californians to opt out of the grid and purchase power directly from wind and solar generators or, for some businesses, create it themselves.
These have, naturally, come with new challenges. Destabilising the sector with PPAs has pissed off early-adopter utility companies that entered into contracts based on earlier, relatively-inflated prices. The role of utilities has absolutely had to change as renewables have made way for “microgrids” too. After all, why pay for power if you can get it from your roof for free?
Not only has California’s economy and population grown since these targets were introduced — with GPD up by almost $5,000 per person from 2006 to 2015 — but the RPS has also directly and indirectly created hundreds of thousands of jobs. Since the depths of the recession in February 2010, employment in the state has grown by 13.8 percent, there are now 8.5 jobs in solar or wind generation for each position associated with fossil-fuels production, and billions in wages and economic growth.
Renewable Growth (And Money)
The growth of solar alone in California has been nothing short of historic. From close to zero output in 2000, solar power accounted for 23,574 GWh of California’s energy mix (or 8 percent of total makeup) in 2016. The industry also employs nearly 250,000 Californians in direct and indirect jobs, produced $47.9 billion in total economic activity in 2016 alone and, through overproduction, resulted in a number of negative pricing events in 2016.
Kind of shames the mere 1,464 jobs that Adani-Carmichael hole in the Great Barrier Reef will create, huh?
Comparatively, wind was introduced much earlier, with the first farms cropping up in the early 1980s. Out of all renewable sources, wind currently accounts for most of California’s energy mix at 26,321 GWh (9 percent of total makeup), employs 4,000 people directly, and — through 12 massive wind manufacturing facilities — has attracted $12.5 billion in total capital investment.
As for the other renewables, the state also gets 4 percent from geothermal (aka stealing heat from the earth’s precious core, helped by the largest geothermal facility in the US), and 2 percent a piece from biomass (aka poop power) and small hydro (which gets to be counted as renewable, while large hydro is not).
California has inarguably demonstrated that the renewables transition can be profitable.
As for us, the common people, the ones not directly employed by these industries? The price of solar has plummeted in America, and has come down 85 percent since 2009. Wind has enjoyed a similar, um, windfall, coming down from $140/MWh to $47/MWh in just seven years too. Both of these are cheaper (yes cheaper) than their nearest fossil fuel competitor in the state: natural gas-fired combined cycle power (which currently sits at $48-78/MWh). This also doesn’t take into account the health and climate costs from carbon dioxide.
While energy bills, by nature, fluctuate according to contracts and usage, CEC officials are adamant that solar and wind are now competitive with fossil fuels; those prices do not take into consideration government subsidies (which, again eventually pay for themselves anyway).
And while it’s required adjustments, mainly for utilities, this level of development has created entirely new, profitable knock-on sectors, such as record investments in clean-energy startups, grid management companies, and electric vehicle manufacturing and infrastructure.
In short, the state is killing it. California has inarguably demonstrated that the renewables transition can be profitable. So much so that they’ve negated the next biggest criticism of green tech…
Are Renewables Really Reliable?
After cost, reliability has been the number one argument against renewables, and unlike cost it still has a tinge of truth to it (although not nearly as much as Turnbull et. al. claim). After all, the sun doesn’t always shine and the wind doesn’t always blow; the earth, however, does always burn, so geothermal gets a pass here.
Luckily for us, California’s level of renewable integrations provides a blueprint for Australia both combating reliability issues and, once again, reducing costs. In 2015, the state’s average monthly residential electricity bill was 20 percent lower than the national average; a difference largely attributed to their energy efficiency schemes.
Commissioner Douglas cites technological and geographical diversification as one of the ways California is meeting its targets. “The sun doesn’t always shine, but the wind blows more at night, for us, than during the day,” he says. “Also geographic diversity. If we have all of our solar in the desert, we’re going to be in trouble on a monsoon day when it’s all potentially under cloud cover. But if we have solar in the desert, and the central valley, and rooftops around the state, we have a lot more of a buffer against these kinds of events.”
“On top of that, we’ve shifted to operating natural gas plants in California very differently, in order to help us manage variability. The beauty of some of these new, very flexible plants is that when needed they can ramp up production, and when they’re not needed they can ramp it back down.”
“Battery storage will really take off in Australia when people can start to see how it works and the benefits.”
Recent research from CEC has shown that solar can provide this same kind of rampage control — that is, when peak demand requires extra energy on the grid, typically in the evening when people return from work. But the state does still require 37 percent of their power from gas (for the record, they’re only at 4 percent coal, an enormous departure from Australia’s whopping 63 percent).
The technology best suited to counter this peak demand, and the one to actively displace gas, is of course storage. We know this because, when a gas leak in Southern California Edison’s Aliso Canyon power plant in 2015 created an historic “all-source procurement” for power, storage pretty much won out. More than 100 MW of battery storage were created in six months, in a scheme that’s created ‘virtual power plants’ and has demonstrably added both output and reliability to the grid.
“They’re now seeing those batteries in operation, doing exactly what they thought they would do,” Stock says. “[They’re] providing more flexibility for the grid, storing excess renewable energy for use later, and securing the electricity supply.”
“And we’ll start to see that here too, with the largest lithium ion battery in Australia about to be built in South Australia, in 100 days, and we’ll see that battery in operation. I think after we see a couple of these examples, large-scale battery storage will really take off in Australia when people can start to see how it works and the benefits.”
The Tesla battery South Australia is getting — the largest in the world! — can provide 100 MW for one hour when fully charged. While one hour of electricity might not sound impressive, remember that that might be all that’s required during that peak period; flexibility and grid management, more so than raw output, is key here.
Where Does This Leave Us?
We can steal all of California’s hard work! Well, not like literally steal it, just ethically. Because as much as we’ve been held back by Australian luddites, all those leaners screaming “we only pollute x amount compared to y from z, why should we lift a single finger?!” were right about one thing: the world has moved on even without us.
Now, we can catch up, but only if we accept the transition, stop pissing away money on “clean coal”, and get with the bloody program.
Energy companies are also still investing in Australia, no matter how needlessly difficult our federal government has made it. Advanced Microgrid Solutions is already in talks with AGL for hybrid building projects, and Geli is similarly looking to capitalise on Australia’s high solar rollout and high power prices.
“Australia has provided a great opportunity with its deregulated market and prosumer-minded citizens,” Geli Vice-President of Business Development Andrew Tanner says. Pointing to the South Australian storms last year, Tanner argues that “if every homeowner that had solar had a 5 KW battery, and South Australia power networks were able to instantaneously dispatch that during the storm, they theoretically could have made up for the shortfall.”
Tesla’s massive battery in South Australia is further proof of international interest in the country. One of Tesla’s competitors, AES Energy Storage, was recently outbid for the battery contract, but plenty more battery projects are on the way and the team is keen to find new project opportunities in the country.
“The good thing about South Australia is it’s just the beginning,” Vice-President Praveen Kathpal says.
This brings up a broader point: as much as federal governments might lag behind, states and cities are doing fucking amazing stuff on their own. South Australia is set to go 50 percent renewable by 2025, Tasmania’s eying 100 percent by 2022, Victoria 40 percent by 2025, Queensland and NT 50 percent by 2030, and ACT 100 percent by 2020.
And while South Australia tends to get the most attention — what with the world’s largest battery already midway through construction and plans for Australia’s largest solar farm set for Riverland — new projects are cropping up everywhere. Renewable energy companies are currently competing to power four of Victoria’s regional towns with 650MW of hybrid projects, Photon Energy wants to build a 316MW plant in NSW, and Shell just won approval for a 250MW project in Queensland “coal country”.
“There’s over 16 of these large-scale solar projects under construction around the country, and some of these are as big as 330MW, the project in South Australia,” Stock says. “So those large scale solar farms are all of a sudden in Australia going to be a common sight.”
California, along with a bunch of other US states, is obviously crushing it no matter what nonsense Trump is pulling at the federal level. But, for all its efforts, the state is now facing entirely different challenges to Australia. Energy companies are stuck with outdated pricing agreement schemes, dying fossil fuel investments, and customers are determined to go off-grid by producing their own energy.
Policy makers are now focusing on bolstering the state’s electric vehicles infrastructure too. Transportation is California’s biggest polluter at a whopping 29 percent of the state’s total emissions (followed by industrial at 23 percent and electricity generation at 19 percent).
Sadly, with a newly appointed, anti-cap-and-trade state Republican leader, that bipartisan success might also be in doubt. But hey, Arnie’s still around, so fingers crossed the new party knows what’s good for them.
“What we saw in California is both Republican and Democrat leadership supporting their strong renewable energy target,” Stock says. “So it’d be great to see that in Australia too, that bipartisanship around future climate and energy policy.”
“But failing that, we might see towns and cities like Lancaster [a city already at 96 percent renewables!], businesses and states, getting on with the job anyway. So there’s still reason to hope even if we don’t achieve that policy certainty.”
Still, it’d be nice if the Coalition stopped wasting time and money on projects like Adani and showed some kind of economic maturity on the issue. Adopt that energy neutrality they claim to love so much, give us the emissions trading scheme and renewable energy target literally every other sector in Australia wants, and then just let the market do its thing. It’s what makes fiscal sense.
As a neat extra incentive, this could also mean we stop killing the planet!
–
The writer travelled to California with the Climate Council Australia.
–
Chris Woods is a Melbourne-based freelance journalist.