Climate and Energy Minister Chris Bowen today announced a boost to get more renewables into the grid through the expansion of the existing Capacity Investment Scheme (CIS) and the National Energy Transformation Partnership (NETP). This expansion will take the CIS from the current pilot stage to 9 GW of dispatchable capacity and 23 GW of variable capacity nationally – for a total of 32 GW nationally.

Energy analysts were increasing sceptical that current policies would achieve the Governments 82 percent renewables by 2030 target.

The projects will be allocated and managed in cooperation with State Governments through agreements in the National Energy Transformation Partnership (NETP). This will ensure reliability is enhanced through objective benchmarks, an orderly transition, and potential strategic reserves.

Around half of the capacity offered under the expanded CIS (18 of 32 GW) will be subject to these agreements. Capacity may be re-allocated from any jurisdictions that don’t make agreements to those that do.

Reverse auctions for projects will take place twice a year to 2027, the first in April 2024.

The program aim is to de-risk clean energy investments and shield consumers from price volatility during a transition to net zero emissions.

Australia is also in competition wth global clean energy investment with the US Inflation Reduction Act. The Capacity Investment Scheme shares the project risks between investors and the Australian Government, making clean energy investment in Australia much more attractive.

Under the Morrison Liberal National Government, 24 coal plants with a total capacity of 26.7 GW announced their closure dates, but the LNP failed to deliver any policy to ensure replacement capacity. Peter Dutton and the LNP policy is to talk up Nuclear Power and Small Modular Reactors as a solution, however Nuclear power is hideously expensive and Small Modular Nuclear Reactors are so far only in early research. Earlier this month, “The only company to have a small modular nuclear power plant approved in the US – cited by the Australian opposition as evidence of a “burgeoning” global nuclear industry – has cancelled its first project due to rising costs. (Guardian) .

The announcement of the Australian renewables boost comes as a Global Renewables Energy Tracker is released. This ranked Australia as 24th of 60 countries with a Moderate ranking, which would not factor in the policy change. Most of the trend assessment is based on data up to 2021, and some to 2022, so will not factor in Federal Government policies, although the 82% target still falls short of the 100% target of the tracker.

Reliability of energy Supply

In an interview on ABC News Breakfast Chris Bowen highlighted one of the reasons why we need to ramp up this investment in renewables is for reliability of energy supply:

“The biggest threat to reliability, energy reliability in Australia today is actually an ageing coal fired powered station which has an unexpected outage, that AEMO and the market operators weren’t expecting, and one day it’s just not working. And that happens quite a lot, it’s happening today as we speak, and we need to ensure we’re getting on new energy to replace the ageing coal fired power stations”

Transmission Grid upgrade

On increasing the transmission grid he articulated that it is not about cutting corners on environmental approvals, or reducing conditions

“It’s not about making environmental approvals more lax, or you know, reducing conditions, “it is about trying to get to yes or no more quickly, which gives communities comfort and certainty, gives the proponents comfort and certainty”

“We need to work with communities better than has happened in the past. We want to bring communities with us more meaningfully than has happened in the past and ensure there’s community benefit, and we all have to do that, all levels of government, and we are working on that through a review at the moment.”

Retail Electricity Prices

On retail electricity prices Bowen told Patricia Karvelas on ABC Radio National that

“over time the more renewables you have in the system the more downward pressure that puts on bills, because renewable energy is the cheapest form of energy. We’re seeing wholesale prices massively below where they were last year, that’s in no small part due to the very high solar penetration we’re experiencing at the moment, and the more renewables set the wholesale price, the lower prices will be. I know people don’t pay wholesale prices, but they do flow through to retail prices after a period of time, it’s one of the key inputs to retail prices.

“You know, the only people who pretend that renewable energy isn’t the cheapest form of energy are our political opponents. Australians who’ve got solar panels on their roof know it, and anybody sensible looking at the energy market knows it as well.

Australia’s climate priorities at COP28

At the Lowy Institute on Tuesday night Chris Bowen outlined Australia’s general priorities for the UN Climate Conference COP28, which included supporting a tripling of global renewables capacity and doubling of global energy efficiency efforts. This announcement is in line with that advocacy position.

On the UN Climate Negotiations Bowen was upbeat that incremental progress would be made at COP28 in Dubai:

“I’ve spent a lot of time, PK, talking, including in the middle of the night to my international counterparts about how we can best progress at this COP. Last COP Australia and others were working just to maintain the status quo, just to defend what had been done at Glasgow. We want to see forward progress at this COP and we’re working closely with the COP presidency and with like mindeds to get as good as an outcome as possible. How will we go? I don’t know. It’s a very difficult geopolitical environment. But we’ll be in there complying with, you know, Australia’s ambition to be very strong advocates for our region, and for strong action across the board.”

Reaction

Australian Conservation Foundation applauded the scheme as locking in Australia’s renewable future, while highlighting caution about unintended consequences to communities and nature.

“It slashes climate pollution from our energy system while keeping the lights on. We have a long, hot summer coming and Australia’s old coal-fired power stations are not only adding to the climate crisis, they are also increasingly unreliable.

“The big renewables build must be done in a way that is good for communities and nature. There is no place – and absolutely no need, on our over-cleared continent – to knock down forests or threatened species habitat for renewable energy projects. 

Friends of the Earth also endorsed the renewables boost, emphasising community consultation and considereation of nature as important in project rollout.

The scale of the build out of renewables and transmission lines required to meet these targets will require robust and transparent assessment of proposed projects. With both onshore and offshore projects, natural environments must be protected. Renewable energy must be located on suitable sites, away from high conservation areas. Companies must be forced to apply best practise consultation with traditional owners and affected regional communities.

David Ritter, CEO of Greenpeace Asia Pacific said “its time to time now to absolutely gun it so that we can smash the 82% by 2030 target and go even further to unlock our potential to be a global renewable energy superpower.”

“Australia is one of the sunniest and windiest countries on earth. Unlocking our potential to be a renewable-powered nation is not only good for energy affordability and reliability, but is also aligned with the scientific need to phase out coal, oil and gas at emergency speed and scale to avoid catastrophic climate impacts.

“Today’s announcement is a welcome step change in renewable energy uptake, and will help deliver another nail in the coffin in the case for new climate-wrecking coal or gas to meet our energy needs. The roll-out of this plan must deliver good jobs, community benefit-sharing, respect the rights of First Nations landholders, and protect nature.

References

DCCEEW, Chris Bowen Media Release, 23 November 2023, Delivering more reliable energy for all Australians https://minister.dcceew.gov.au/bowen/media-releases/delivering-more-reliable-energy-all-australians

DCCEEW Transcript, 23 November 2023, Interview with Lisa Millar, ABC News Breakfast https://minister.dcceew.gov.au/bowen/transcripts/interview-lisa-millar-abc-news-breakfast-3

DCCEEW Transcript, 23 November 2023, Interview with Patricia Karvelas, ABC Radio National https://minister.dcceew.gov.au/bowen/transcripts/interview-patricia-karvelas-abc-radio-national-6

ACF, 23 November 2023, Vital plan to get Australia to 82% renewable energy https://www.acf.org.au/vital-plan-to-get-australia-to-82-renewable-energy

FoE, 23 November 2023, Albanese gov to rapidly expand investment scheme for clean energy projects https://www.foe.org.au/albanese_gov_to_rapidly_expand_investment_scheme_for_clean_energy_projects

Climate Action Network, 22 November 2023, Renewable Energy Tracker https://climatenetwork.org/resource/renewable-energy-tracker/

Photo: Bald Hills Wind Farm, Victoria, John Englart