Transcript getting homes and small business to invest in renewable energy

PV or NPV: getting homes and small
business to invest in renewable energy
Energy in Western Australia 2008
14 August 2008
Dr Ray Wills
Chief Executive Officer
Western Australian Sustainable Energy Association Inc.
Responding to climate change
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The threat of dangerous climate change is not just an
environmental issue - underscores the need to build a
sustainable economy.
An effective response will change the way we use
energy and in so doing, future proof our economy.
Action by government, business and the community
must put in place measures that
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reduce unnecessary use;
promote energy efficiency across life cycles;
reduce reliance on increasingly expensive traditional
fuels and improve energy security;
produce energy through renewable generation; and
offset remaining emissions.
Sustainability in a changing climate for the
community - and business.
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All corporates have worked for years or even decades on
pro-environment strategies and corporate social
responsibility, and growing awareness of global warming
among consumers is accelerating change.
Businesses in green buildings report improved productivity,
better staff retention - particular Y Gen, fewer sick days,
millions of dollars in energy savings and a reduced
environmental footprint.
Property landlords Higher relative investment returns
(minimum 14% ROI); marketing advantage (free
promotion); higher market value for asset (10% increase);
higher rents (5-10% increase); and according to a recent
evidence, the cost to build green is less than a 3% premium
above the costs of standard construction.
Sustainability
Sustainability
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Key attributes include:
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Dealing transparently and systemically with risk,
uncertainty and irreversibility.
The principle of continuous improvement.
The need for good governance.
A commitment to best practice.
No net loss of human capital or natural capital.
Ensuring inter-generational equity.
Integration of environmental, social, human and
economic goals in policies and activities.
Responding to climate change
ABS STATISTICAL INDICATORS - WA • 1367.5 • JUN 2007
Responding to climate change
ABS STATISTICAL INDICATORS - WA • 1367.5 • JUN 2007
Renewable energy generation
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Opportunities in
resource distribution
- wind, wave, solar,
geothermal
Biomass productivity
Wind
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Spatial relationships
Renewable energy in Western Australia
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Solar Energy - Photovoltaics (PV)
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Grid-connected and stand alone power systems for remote
telecommunications infrastructure and water pumping
systems. PV modules also in many niche applications,
including emergency telephones, street and other outdoor
lighting, and marine navigation buoys.
Solar thermal
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Low-Temperature Collectors
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Medium-Temperature Collectors
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Used for space/water heating
Heat swimming pools
Industrial - salt production in
salt farms!
Hot water needed for residential
and commercial use
High-Temperature Collectors:
Concentrated solar power
Heat storage
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Heat storage - transfer
the heat to a substance
(molten salt, silicon phase change products, pressurized steam)
which can hold the heat with a high energy density.
Responding to climate change
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Fossil fuel prices will
continue to push up
inflation, but renewable
energy will continue to
shine on us, to
wash up on our shores,
and to
blow past us without
additional cost.
Australia is the Middle East of renewable energy and
we are failing to harvest the energy bonanza for the
benefit of the Australian economy and especially for
and in support of Australia’s export industries.
Responding to climate change
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Responding to climate change will create opportunities,
establish new businesses, and create new jobs.
Renewable energy generation is generally more labour
intensive, and more broadly distributed across regions.
With a better employment factor, a diversity of renewable
energy projects can lead to growth of local communities in
rural WA.
Any economic analysis must
fully assess the benefits
to the community – that’s
a part of sustainability.
PV or not PV
PV Market Development
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Production of photovoltaic cells (PV) reached 3,800
megawatts worldwide in 2007, up an estimated 50
percent over 2006.
Cumulative global production stood at 12,400
megawatts,
PV production has been doubling every two years
since 2002, making it the world’s fastest-growing
energy source.
China tripled PV production in 2006, and more than
doubled output in 2007. With more than 400 PV
companies, China’s market share has moved from 1
percent in 2003 to over 18 percent by end of 2007.
(Jonathan G. Dorn, Earth Policy Institute 2008)
PV or not PV
PV Market Development
(Earth Policy Institute 2008)
PV or not PV
PV Market Development
(Earth Policy Institute 2008)
PV or not PV
PV Market Development
(Earth Policy Institute 2008)
PV or not PV
Australian PV Market Development
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All
(APVA, 2008)
PV or not PV
Some barriers to uptake
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A state and national energy policy
Incentives for distributed generation and home
generation from a diversity of sources
Promoting early movers
Removing impediments to market entry
PV rebate commenced in 2000 and currently funding
likely to be used by 2009
Householder only rebate
Market uncertainty
- 2000 $5.50/Wp then $4,
- 2007 $8/Wp, then $8 means tested
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PV - or not PV.
Australian PV Market Development
Watts Installed by
Month
1,000,000
900,000
800,000
700,000
600,000
500,000
400,000
300,000
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100,000
2000
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Grid Watts
2004
SAP Watts
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2008
PV - or not PV.
Australian PV Market Development
Number of Systems
Installed
4,500
GRID
4,000
3,500
3,000
OFF-GRID
241
2,089
1,176
2,500
2,000
3,271
1,500
1,000
951
1,873
2,076
64
1,005
500
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488
219
WA
TAS
98
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231
7
NSW
VIC
QLD
SA
NT
ACT
Feed in Tariff principles
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Electricity buy-back rate which provides payback within
the life of the system / scheme
Enhanced tariff is mandated and paid for via a levy on
electricity sales (sometimes from Government budgets)
Can be paid on total generation, generation net of
customer usage, up to a set limit, time of generation
etc
Tariff for the year of installation is guaranteed for a set
period
Can attract huge investment in renewables if
appropriately structured
Provides advantage to the most efficient technology
(adapted from Muriel Watt, UNSW, 2008)
WA SEA Feed in Tariff model
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Nationally consistent FiT above electricity tariff
Payment on total generation – a gross feed in tariff
Small/medium enterprise should be eligible for systems
under 1 MW.
No cap on eligible customers
Any renewable energy
Initial starting tariff should aim to repay capital cost
over a FiT time period in less than 15 years, preferably
half this time.
FiT cost should be covered by customer levy, rather
than government budget
Levy should be spread across all customer types
Responding to climate change
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2 Million every 5 minutes
WA SEA – WA’s peak business body for
the sustainable energy industries
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WA SEA Members - the business part of the solution to
climate change - developing and adopting technologies
and services that minimise energy use through
sustainable energy practices and maximising energy
use from sustainable sources.
The inconvenient truth - time has run out
for solutions that are simply convenient.
Dr Ray Wills
WA Sustainable Energy Association
[email protected]
Future Smart Strategies
[email protected]
School of Earth and Geographical Sciences,
The University of Western Australia
[email protected]