No Australian state or territory is more ambitious than the ACT in regard to future renewable energy use – as we have been reminded by a string of announcements from Environment Minister Simon Corbell. Renewable energy businesses will shortly be invited to bid for the supply of 200 megawatts of wind power to the territory. And Mr Corbell has also outlined plans for a 50-megawatt solar farm (perhaps with an energy storage capacity) and a 23-megawatt bioenergy plant running off municipal solid waste. The initiatives, when combined with existing solar energy sources, are likely to go a long way towards helping meet the government’s target of having 90 per cent of Canberra’s electricity come from renewable sources by 2020.
The environmental benefits of using renewable energy – estimates are that the 200MW wind auction alone will reduce greenhouse gas emissions by about half a million tonnes each year – are the biggest driver in the take-up of solar and wind technologies in Australia and the world. Downstream economic benefits from investment in renewables are also an attraction for governments. Mr Corbell has spoken of the academically well-endowed ACT being ideally placed to take advantage of this “rapidly emerging area of technology”. But with the potential pluses come minuses.
The most obvious drawback is the inability of renewables like wind and solar to provide a 100 per cent reliable supply of energy. This necessitates the maintenance of a baseload capacity (usually provided by coal-fired power stations) or the importation of electricity from elsewhere. Though Denmark is a major producer (and exporter) of wind power, it still relies heavily on fossil-fuelled power plants. With the viability of these power stations threatened by the expansion of hydro-power and nuclear energy projects in neighbouring countries, Denmark is on the verge of having to import electricity for the first time. Progress has been made in ironing out wrinkles in renewable energy delivery, but with an efficient means of storing large amounts of electricity still to be developed, renewables remain inherently unreliable.
Wind-powered turbines and solar panels may produce energy with zero emissions, but their manufacture and installation consume considerable quantities of steel, concrete and rare earth metals, the production of which adds considerably to greenhouse gas emissions. Their lifespans are relatively short too, some 25 years or so.
Wind project developers choose the location of farms based on wind resources and not on whether the transmission line can cope with added capacity. Adding generation to a transmission line can reduce the network capacity available to all generators and create congestion. In the case of household solar energy panels, network providers have to spend millions of dollars in upgrades to cope with the increased supply of electricity into the grid. Even though solar customers may cost the network more than non-solar customers, they wind up paying a lot less because of the electricity they generate for their own use.
All of these hidden costs are met by government through various subsidies – but are paid for in the end by all electricity consumers. Household electricity prices in Denmark are, not surprisingly, among the dearest in Europe. They are even higher in Spain, which pursued ambitious solar energy production targets until the global financial crisis forced a rethink. Germany, too, is reconsidering transition to renewable energy with the realisation subsidies costing business and consumers €24 billion ($37 billion) each year are unsustainable.
The cost to individual Canberra households of the government’s solar initiatives has been put at less than 50¢ a week. The move to wind is expected to add about $1.30 a household a week. By the time the 90 per cent renewable energy target is reached, Mr Corbell says, the extra costs per household will peak at about $4 a household and then start to decline.
Because the ACT is affluent and has no industry to speak of, quibbles about costlier electricity are likely to be minimal. Certainly its “clean economy” credential will be enhanced. But the government has a duty to ensure energy is affordable as well as clean, and that all electricity consumers should pay their fair share of network costs.
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