Australia's clean energy past and prospects

Last week I managed to catch-up with Ric Brazzale, CEO of Green Energy Markets and Trading, one of the largest creators/brokers in solar renewable energy certificates (often referred to as STCs), and a leading analyst on the market in renewable energy certificates. For anyone heavily engaged in the clean energy sector, Ric is someone well-worth paying attention to.

Ric's history with the clean energy sector goes back to before the Renewable Energy Target had even been announced. Back in the mid 1990s he was the head of the Australian Eco-generation Association and then the Business Council for Sustainable Energy, which ultimately became the Clean Energy Council we know today.

He was actively engaged in the processes around the creation of the National Electricity Market, battling against rules that were already being shaped in favour of the existing large incumbent generators and owners of electricity networks, rather than distributed generation new entrants. He was also a key player in the development of the Renewable Energy Target and its evolution and expansion over time.

And Brazzale was probably the lone business voice that has consistently argued in favour of a market-based mechanism to address the Australian economy's incredibly high carbon intensity.

Ric was never the kind of empty-vessel, mouth-piece you commonly see heading most of Australia's industry associations. Also what distinguishes Ric from the other carbon market and policy analysts/modellers is that he prides himself on staying in close contact with the companies engaged day-to-day in rolling out clean energy technologies.

This means that he can often see things coming that other analysts like ACIL Tasman or SKM-MMA miss, in spite of their incredibly sophisticated and complicated market models. For example, Ric was the only renewable energy market analyst who managed to predict that Solar PV would still manage to boom after the removal of the $8000 rebate and its replacement with substantially lower financial support under the Solar Bonus initiative (often referred to as the Solar Multiplier).

This long experience and his closeness to businesses across the entire spectrum of the clean energy sector gives Ric an excellent perspective on the past and present.

The interview with Ric has been divided into two sections. The transcript published today covers his perspective on how the clean energy sector has evolved over the past 15 years and what he sees for the future.

Tomorrow covers his thoughts on the review of the Renewable Energy Target, the need to implement a market-based scheme to encourage reductions in peak demand, and the formation of a new association for agents involved in aggregating RECs from small-scale generators, particularly solar.

To summarise today's transcript, Ric maintains an optimistic outlook.

On the current state of politics he thinks, “It'll be a bit ugly in the next little while. But I think longer term, the need to reduce greenhouse emissions is not going away.”

In terms of large scale renewables such as wind, he thinks that they are poised for rapid growth, even though things have been a little dour of late. And he is just blown away by the transformation in the solar sector in Australia, “It's amazing when we think now there are about one and a half million homes/ installations of either solar hot water or solar PV systems across Australia. That's just phenomenal and we never would have thought that would have happened.”

In thinking about a future Liberal-National Government, Ric notes that there are some good things on which to build. These include maintaining their current position of supporting the Renewable Energy Target and building on Greg Hunt's positive rhetoric about energy efficiency through getting them to support an energy-efficiency credits scheme.

In relation to the Direct Action policy, Ric's direct experience with the Howard Government's grant tendering program for acquiring greenhouse gas abatement provides a clear lesson, “In hindsight, we were unfortunate to have been successful in tendering for that program and it just proved really difficult to actually deliver anything out of that. We were looking at support for small scale gas fired power generation, and really after a couple of years we weren't able to get any projects up. It just proved too difficult.”

For Direct Action to work Ric believes it must provide, “reasonably transparent pricing [around the value of abatement] and people can respond to those prices.

"You can enter into commercial arrangements, contract around that and internalise the benefit. You can't do that with a grant-style scheme because you don't know whether you've got the grant and you may never know until after you've spent lots and lots of money. Even then you might get the grant and then just have difficulty in closing the projects. So, show me how many grant based schemes have delivered actual projects on the ground – it's a really sorry tale of affairs.”