• Energy Research

In response to increasing awareness of climate change, the Howard government implemented the Mandatory Renewable Energy Target (MRET) in 2001. It requires electricity wholesalers to source an additional 9500 GWh of electricity from renewable sources by 2010. Electricity wholesalers are required to subsidise renewable energy generators by purchasing Renewable Energy Certificates (RECs) equivalent to the target; failure to do so incurs a penalty of $40 per megawatt. Economic analysis is used to investigate the design and likely operation and limitations of the MRET.

In Australia, grid integration of renewable energy (RE) resources has been very popular due to public awareness of climate change and favorable government policies. The initial mandatory renewable energy target (MRET) has been successful and there has been a revised target (RET) set for next decade. On the other hand, there are some regulatory and technical issues posing hindrances to the development of renewable resources. This paper discusses the opportunities and problems associated with renewable energy integration into Australia's National Electricity Market NEM. Issues such as the regulatory frameworks, access standards as per National Electricity Rules (NER), connection process, and transmission pricing frameworks are discussed.

In June 2004, the Prime Minister of Australia, John Howard, released the long-awaited government blueprint for the favoured policy direction for the country's energy sector, Securing Australia's Energy Future. In part this document was a response to a review of the operation of Australia's mandatory renewable energy target (MRET), a regime that started in April 2001. MRET was put under detailed scrutiny from March 2003 onwards by a four-person panel (the Tambling Committee), appointed by the Howard coalition (conservative) government, that received 248 detailed submissions and finally released its findings to the public in January 2004. This paper presents an overview of (i) the range of opinions on MRET presented to the Tambling Inquiry; (ii) the recommendations of that Committee; (iii) the final judgement on MRET enunciated in Securing Australia's Energy Future; and (iv) the response of the States.

Australia, one of the world's largest producers of coal, is used as a case study to compare the employment potential in the coal and wind power electricity generation industries. It is revealed that, as a result of automation, employment in the coal mining industry fell by 45% between 1987 and 2002. Moreover, as a result of the restructuring of the electricity industry as a whole, employment in the industry plunged by 50% during the 1990s. By serving as a substitute for coal power, the wind power industry, with 50% local content in dollar terms, already creates two to three times the number of direct, local job-years per kWh generated than coal power. If an expansion of the Australian content of a wind power were to be facilitated by appropriate government policies, this ratio could be expected to double, thereby indicating that a shift towards "cleaner" energy sources need not come at the expense of employment.

This article examines in detail the current initiatives offered by the Australian federal and state governments to promote the generation of electricity by renewable energy resources. Particular emphasis is given to the new mandatory renewable energy target, which is the major federal government initiative and likely to remain so in future in light of the government's unwillingness to ratify the Kyoto Protocol or to establish a national atmospheric emissions trading scheme. Selected criticisms are given of the various government initiatives.

Abstract There is growing worldwide interest in the use of market-based policy instruments for climate change regulation in the electricity sector. These mechanisms would seem to offer some efficiency and flexibility advantages over more traditional regulatory approaches, while being highly compatible with competitive market-based electricity industries. Australia has been an early and enthusiastic adopter of both electricity industry restructuring and market-based environmental instruments. This paper first outlines some of these recent policy developments. In particular, we describe the objectives, design and outcomes to date of electricity industry restructuring, the Mandatory Renewable Energy Target, the NSW Greenhouse Benchmarks, the Queensland 13% Gas scheme and Government accredited Green Power. From this, we draw some key design lessons for such market-based instruments. These include the perils of abstraction in scheme design, the vital importance of setting appropriate baselines in ‘baseline and credit’ schemes, the possibility that such measures may interact in ways that reduce their environmental effectiveness, ‘market for lemon’ risks with tradable instruments that have measurement, verification or ‘additionality’ difficulties, and the challenges of creating transparent liquid markets for these mechanisms. The mixed performance of these Australian schemes to date illustrates the need for great care in designing such market-based approaches.

Denmark has been the world’s leader in wind energy for many years. In 2011, Denmark produced 28.3 per cent of its electricity from wind power, the largest share of any country in the world. Denmark has had a successful wind energy industry since the 1970s, supported by energy taxes for many years. In addition to these taxes, Denmark has initiated planning law reform and linked wind power development to industry development, heavily involving local communities. Over many years, these policies have helped provide certainty to the industry and allayed community concerns. Australia, on the other hand, has been slowly developing a wind energy industry following the introduction of a mandatory renewable energy target (MRET) in 2001 and a carbon tax in July 2012. In 2013, Australia produced 4 per cent of its electricity from wind energy. The recent repeal of the carbon tax and the review of the MRET has resulted in uncertainty for the wind energy industry and a consequent withdrawal of investment. Australia and Denmark are different geographically and geopolitically. Australia is a large, sparsely populated land mass, with wind energy regulated by separate States. Energy security is not an issue. This is advantageous for Australia in that it enables Australia to have large buffer zones for wind turbines and the ability to capture wind at all times through wind turbines at different locations. Refereed/Peer-reviewed

Abstract This paper attempts to identify the types of renewable-based power generation technologies available in Australia that have the capacity to contribute to the growth of the renewable energy sector and then suggest what type of economic incentive instruments could be applied in order to stimulate investment in that sector. Currently in Australia there are hydro, wind, bioenergy, solar, geothermal and ocean technologies being used to produce renewable power. Of these all except hydro power has large amounts of potentially useful resources. In the cases of wind, bioenergy, solar, and geothermal, the technology is mature enough to be immediately deployed in large-scale. However, only in the cases of wind and bioenergy the costs and return on investments are proven to be viable in the current market. What is required on all fronts is an improved return on investments. Within the current electricity market competition with fossil-fuel based power is very difficult considering the ample supply of coal available in Australia and the heavy subsidies it receives. To become more competitive with electricity generated from coal-fired power plants, a feed-in tariff scheme could be implemented, and subsidies to the coal industry should be reduced if not removed. Another aspect impeding the growth of certain renewable power technologies is the high capital cost. This issue could be addressed with direct subsidies or tax exemptions, or aiding with easier access of finance options. However for particular industries such as wind and solar, it would be a further benefit if some effort is made to encourage component manufacturing within Australia. For technologies that require further technical development, funding towards R&D or pilot projects, and support for international collaboration projects would accelerate their path to deployment. It is critical that the Australian government continues to be a leader. In addition to the Carbon Pollution Reduction Scheme (CPRS) and an extension to the Mandatory Renewable Energy Target Scheme (MRETS) proposed by the federal government, the Council of Australian Governments (CoAG) must work to streamline policies between the federal and state governments and the latter must apply policies unique to their region for what technology is prevalent.

Abstract In Australia, the Mandatory Renewable Energy Target (MRET) scheme, which targets a 9.5 TWh per annum increase in renewable electricity generation by 2010, is stimulating interest in bioenergy. Development of bioenergy projects may cause competition for biomass resources. For example, sawmill residues are an attractive feedstock for bioenergy, but are also utilised for particleboard manufacture. This study compares the greenhouse gas (GHG) mitigation impacts of alternative scenarios where sawmill residues are used either for generation of electricity or for manufacture of particleboard. The study considers a theoretical particleboard plant processing 100 kt feedstock of dry sawmill residues per annum. If the sawmill residues are used instead for bioenergy, and the particleboard plant utilises fresh plantation biomass, 205 kt CO 2 eq emissions are displaced. However, GHG emissions for particleboard manufacture increase by about 38 kt CO 2 eq, equivalent to 19% of the fossil fuel emissions displaced, due to the higher fossil fuel requirements to harvest, transport, chip and dry the green biomass. Also, plantation carbon stock declines by 147 kt CO 2 eq per year until a new equilibrium is reached after 30 years. This result is influenced particularly by the fossil fuel displaced, the relative efficiency of the fossil fuel and bioenergy plants, the moisture content of the sawmill residues, and the efficiency of the dryer in the particleboard plant. Under MRET, calculation of Renewable Energy Certificates is based solely on the quantity of power generated. This study illustrates that indirect consequences can reduce the GHG mitigation benefits of a bioenergy project. Increased emissions off-site, and loss of forest carbon stock, should be considered in calculating the net GHG mitigation benefit, and this should determine the credit earned by a bioenergy project.