Hareon's Samuel Yang and GE's Ben Waters are betting that renewable energy is here to stay, writes Peter Hannam.
As proponents of green energy go, Samuel Yang and Ben Waters could hardly be less alike. Yang, dubbed by the Chinese media as the "godfather of solar energy", is a Buddhist vegan who befriended solar scientists while studying economics at Macquarie University in Sydney. He returned to China to found four of the largest solar photovoltaic companies in the world.
Ben Waters, director of Australia's sustainable business strategy for General Electric, sings in church choirs, and as a Hobart schoolboy brooked bullying by opposing the Franklin River dam. He arrived at the corporation after years maintaining F/A-18 fighter jets.
Both Yang and Waters, though, share similar visions for the future of energy: the shift from large-scale fossil fuel power plants has to happen if we are to limit global warming, and the pace of the transition will surprise even supporters.
Of the two, Yang is arguably more of a revolutionary. As chief executive of Shanghai-listed Hareon Solar Technology, Yang is in the midst of a battle for survival in an industry that has risen about 50 per cent annually since 2002.
Two of Yang's start-ups, JA Solar and Suntech, are among Chinese companies flooding global markets with low-cost solar photovoltaics. Suntech is also fending off creditors after a loan default earlier this year.
"This overcapacity is normal for any new industrial technology," Yang said during a visit this week to Melbourne. "Solar technology is always advancing fast ... and some companies will drop out."
PV prices in Australia are now below 90¢ a watt, down by as much as two-thirds in a couple of years. About one in eight Australian homes now have solar panels, and Yang says penetration rates could rise to 80 per cent in coming years given Australia's high electricity prices, "such wonderful sun", and the likely arrival of even cheaper solar PV and later low-cost batteries.
Yang won't say how much further prices will fall, but any pause in the decline is likely to be temporary.
Even the threat of European tariffs for alleged dumping is dismissed. "It's a silly childish game. I believe it won't last long."
Yang bets European leaders will be wary of sparking a trade war with the growing Chinese market and losing downstream jobs linked to the spread of cheap Chinese products. His focus, though, is to expand his company into energy production itself. "We have to invest in solar farms: that is the direction of this industry," he says. "We should become energy suppliers."
The US industrial conglomerate GE has investments in many industries but becoming a big power generator is not yet a priority.
A major equipment supplier to fossil fuel industries such as coal and coal seam gas, GE also rivals Denmark's Vestas as the world's biggest producer of wind turbines.
"We're energy agnostic," Waters says of GE.
"We want to be involved in the energy sector of the future and we're transitioning our business accordingly into distributed power, into renewables, into smart grids and energy storage."
The spread of trigeneration, with plants generating heat, cooling and power to local precincts, is among GE's target businesses.
Waters directs GE's ecomagination division in Australia, and chairs the advocacy group Sustainable Business Australia - a role that puts him at odds with firms opposed to a carbon price.
GE has imposed internal controls on carbon since 2005 and has cut its absolute footprint by 30 per cent since then. Revenues in its energy efficiency and other sustainable divisions now top $US21 billion a year and are rising. Annual growth of such products in Australia is in the order of 40 per cent, and $1 billion-a-year revenues are not far off.
The combination of a renewable target, the relatively high carbon price and other supportive government policies have made Australia a testing ground for a range of new lines. These include fuel cells, carbon capture and storage, and hybrid solar thermal and gas combined-cycle power technologies.
Waters is no fan of the Coalition's policy to repeal the carbon price and replace it with a "direct action" plan. "I'd be fundamentally worried about a scheme that has the taxpayer paying industry for emissions reductions," he says.
Waters says he'd be surprised if a Coalition government ends up ditching the carbon price.
"You can say we have a vested interest," he says. "I think we're just being smart.
"Smart business detects the trends, grabs the first-mover advantage and is well-positioned for the new world rather than hanging on to the old."
Yang supports such sentiments and denies self-interest is his motivation, rejecting Chinese reports that his solar investments have made him a billionaire. His 13.6 per cent holding in Hareon alone is valued at $180 million.
"When people talk of me a godfather, I get really embarrassed," Yang says.
"I try to be a simple person. As a Buddhist, why do you need that sort of money?"