Representatives of the solar sector are claiming victory from the Queensland election result, but they might want to hold-off on popping the champagne corks.
At present it’s not absolutely clear who will form government in Queensland, although it appears Labor are the frontrunners to take power with the assistance of crossbench MPs who have all had tensions with the LNP.
The reason for the celebrations is understandable. The Newman Government has not been a great friend of the renewable energy sector. As explained yesterday, they spent much of their time in office trying to scapegoat renewable energy for power price rises that were largely the fault of other factors. Although, it should be said, the manner in which they announced the closure of the 45 cent premium feed-in tariff – which provided a relatively wide time window for people to get in their applications before it closed – meant they were inadvertently responsible for the biggest sales boom the solar sector has ever experienced, and probably ever will.
Yet while Labor may be making much kinder, more enthusiastic sounds about renewable energy, the solar sector cannot count them as its friend.
With Labor retaining ownership of the power generators and network businesses, and with government finances stretched, they will have an attuned ear to the complaints of their power companies that solar is hurting their profits.
If Labor manages to form government, watch as its various assorted and apparently pro-solar policies get creatively interpreted by the bureaucracy and ministers responsible for portfolios outside of the environment.
Having been involved in these processes for around a decade, I’ve learnt a few of the tricks involved. A shadow minister for environment and/or energy puts forward a selection of stakeholder "policy asks" to the overall leadership and campaign team. They then try to remove anything specific and concrete which they might be easily held accountable for, replacing it with something more vague but which appears to deliver the same thing. Or they apply timeframes so far out into the future that the commitment can be forgotten. The aim is to co-opt the stakeholders as supporters during the election, while giving the party latitude if they form government to do very little.
I’ve already critiqued this policy in an earlier column (Queensland Labor talks bold, promises little on renewable energy), but with a Labor Government now reasonably likely, it’s worth another look.
The target for 50 per cent renewable energy by 2030 within the document isn’t worth much at all. The target is challenging (Sir Humphrey would say, "brave"), the timeframe is distant, there’s no mention of a policy mechanism to deliver it and all they’ve said is they’d like to study it, not deliver it. So you can toss that one into the bin.
Image: Labor’s 'Solar Future' policy document ... how will it be interpreted?
They’ve also set a goal of a million roofs with solar panels by 2020. That’s actually something you can work with.
Firstly, unlike SA Labor’s extremely Machiavellian 50 per cent renewables target (exposed in South Australia’s do nothing renewables target), Queensland Labor might actually have to do something to achieve it. There are approximately 430,000 rooftop systems in Queensland with solar systems, and last year 60,000 were installed in the state. A similar annual installation rate manages to get them to about 800,000 by the end of 2020 leaving them 200,000 short. Although if you define solar water heating units as “solar panels” then the gap drops to something far smaller.
Also, importantly, the timeframe is near enough that they really need to start doing something this term.
But the problem is they haven’t provided a concrete policy mechanism to deliver the target. This is where the hard work lies.
Now, yes, they’ve made nice sounds about wanting a “fair price for solar homes selling their power back into the grid”. This is close to worthless – fair price could mean anything.
I dealt with exactly the same phrase with the Victorian Labor government back in 2006 while working for the Clean Energy Council. At the time solar enthusiasts interpreted the promise of a “fair price” to mean solar systems would receive a substantial premium for power over what was already on offer. At the time you could get paid the same rate for power exports as the retail price for imports.
But what the energy bureaucrats and their minister decided this meant was households would receive the going retail price for power – essentially, just locking-in existing practice. It has then been reinterpreted several times to mean a premium on the retail rate and a major discount on the retail rate.
I suspect solar enthusiasts and many Queensland system owners think “fair price” will be interpreted to mean they’ll be paid the same price for power they export as for power they import – but it won’t.
That’s because there’s a rider on the policy commitment that it, “must not have an unreasonable impact on network costs for non-solar users.”
It is conceivable that a very thorough review involving well-qualified electricity system experts might lead to reforms that would increase the price paid for solar system exports while still being consistent with this rider. These might include:
– an increase in the price paid for power exports during periods of localised network line demand peaks;
– customers in remote areas of the grid that impose high costs on the network would be given an incentive to reduce their load on the network or even disconnect; and
– customers' own power generation to be paid the avoided cost of diesel fuel in Ergon’s off-grid areas.
But don’t hold your breath.
Lastly, I’ve already highlighted how the promise to acquire 40 megawatts of renewables (the document foreword strangely mentions "baseload" but without further mention or definition) is a minuscule token gesture. But Labor provided a hook to keep the renewables sector interested – they said it was a “trial”. The hope would be this could be the start of something bigger and better. But whether hope becomes reality will no doubt be the subject of multiple fights within a Queensland Labor Government, with the state-owned power generators fiercely in opposition.