The whole story on Victorian renewables

A new report demonstrates that the Victorian Auditor General’s conclusions on the potential of renewable energy in the state were flawed – overstating the problems, while understating the progress.

In April 2011, the Victorian Auditor-General tabled a report Facilitating Renewable Energy Development which took a dim view of the potential of renewable energy.  

There was widespread media coverage of this report, which focussed heavily on his finding that the proportion of electricity from renewable sources has only increased from 3.6 per cent in 2002 to 3.9 per cent in 2009. This was widely taken as proof that attempts to expand renewable energy had failed and is now often quoted by renewable opponents.

A new Clean Energy Australia 2011 report from the Clean Energy Council demonstrates the Auditor General’s conclusions were flawed and that renewable energy is strongly growing and is now providing around 11 per cent of Victoria's electricity consumption.

The total amount of electricity generated from renewable sources in Victoria has actually doubled since 2000 and there are substantial imports from Tasmania and the Snowy. Given the large number of planned projects in the pipeline, the target of 20 per cent of electricity from renewable sources by 2020 remains challenging but feasible.

As I have previously argued on Climate Spectator, here, the Auditor General's conclusions significantly overstate the problems and understate the progress in developing Victoria's renewable energy resources. The problem arose because the Auditor General used atypical years to base his comparison. Hydro-electricity production peaked in 2002, before halving over the following 7 years due to drought.

The figures used by the Auditor General clearly show that by 2009 annual wind generation in Victoria had increased from 80 to 1,027 gigawatt-hours (GWh). Biomass had added an extra 165 GWh, with solar pv already adding 26 GWh. 

RENEWABLE ELECTRICITY GENERATION WITHIN VICTORIA (GWh)

 

2002 (a)

2009 (a)

2010/11 (b)

Wind

     80

1,027

1,280

Biomass

   360

   525

   591 est

Hydro-electricity

1,100

   500

1,200

Solar photovoltaic

negligible

     26

   200 est

Total

1,520

2,079

3,205

Total Victorian generation (c)

48,200

52,000

50,900

 

3.1%

3.9%

6.3%

Sources:

(a)    Victorian Auditor-General’s Office, from Figure 1D. Actual 2002 proportion was 3.1 per cent, not 3.6 per cent

(b)    Clean Energy Council and Sustainability Victoria

(c)    Australian Energy Regulator data from State of the Energy Market 2010

The Clean Energy Australia 2011 report and the latest Sustainability Victoria figures show both wind and solar have continued to grow strongly, while hydro production is now higher than in 2002 (due to a return to more normal rainfall patterns and the new 140 megawatt Bogong hydro power station which opened in late 2009).

A separate major issue is that the Auditor General's figures exclude the renewable energy Victoria draws from the one-third of the Snowy scheme that the state owns, which amounted to 1,300GWh in 2010. Hydro Tasmania reports a further 1,152GWh is drawn from Tasmanian hydro, through Basslink, which feeds slightly less Victorian brown coal power back to Tasmania in off peak times. Together, these add another 5 per cent to the proportion of electricity consumed in Victoria that comes from renewable sources.

Sustainability Victoria reports wind generation from the existing 432MW of installed capacity has increased to 1,280GWh on a 12 month rolling basis to September 2011. Another 537 MW of capacity is under construction at three locations and due to be on line by 2013. Unfortunately these projects are likely to be the last to make it out of the planning pipeline due to the draconian new rules introduced by the Baillieu government to give a veto to any resident within 2km of a proposed wind project.

Solar roof-top PV has skyrocketed from 16MW to 151MW of installed capacity over the last two years, including 82,000 Victorian households and ten commercial medium-sized installations. Solar photovoltaic systems still only represent 5 per cent of total renewable output, but the growth rate is staggering despite cutbacks in subsidies. An optimistic view is that if the current rate of retrofits (3,000 a month) continued, and all 300,000 new homes had PV installed, there would be over 600,000 Victorian rooftop solar systems by 2020.

However, household PV would still only deliver about half the target of 2,500GWh from solar energy by 2020 set by the Brumby government. Installations on commercial buildings could take off if energy market barriers are removed that block sharing electricity across property boundaries.

The large solar plant (500GWh) Silex plans for Mildura is making slow progress, but the TruEnergy proposal missed out on the federal government's Solar Flagships funding, throwing it into doubt. Around four such plants would be needed by 2020 to achieve the target – assuming continued good take up of domestic small-scale plants. However, this remains feasible given rapidly improving costs and the probability of retail parity pricing within five years.   

What's missing from all these calculations is the substantial contribution being made by solar hot water systems. Sustainability Victoria reports that in 2004 there were around 20,000 solar hot water heaters in Victoria, amounting to the equivalent of 56GWh in reduced power use.

The number of installed water heaters in Victoria has now topped 133,000, according to the Clean Energy Australia Report 2011; boosted by the surge in 2009, when generous subsidies were available from both state and federal governments. This represents a saving of around 370GWh, or another 0.7 per cent of total energy production – although in Victoria much of this will be in reduced gas consumption.

Assessing the contribution of renewable energy is complicated, because the major reporting agencies (AER, AEMO, ABARE, ESAA) only count registered generators. This means unscheduled sources under 30MW – mostly renewables and cogeneration – are not included in the data. In addition, reported data is of total generation and not consumption, which means counting the energy used on site, or in transmission, overstates the contribution of centralised power stations to end users.

There is an urgent need to reform energy reporting arrangements to properly account for all these factors and give an accurate picture of consumption and each renewable source by state to ensure future energy policy is based on sound data.

Clearly, renewable energy is making strong progress. Over 11 per cent of Victoria's electricity consumption already comes from renewable sources, state boundaries disregarded.

The bad news is that year-to-year variability of renewables is a real issue, particularly for hydro. The good news is that nationally, renewables are already providing over 10 per cent of electricity consumption and the target of 20 per cent by 2020 is well within reach.

INSTALLED RENEWABLE CAPACITY IN MEGAWATTS

 

Victoria a)

Australia

Hydro

803

8,501

Wind

432

2,175

Bio-energy

113

   773

Solar pv

152

1,041

Solar thermal

    0

       3.2

Geothermal

    0

       0.1

Wave

    0.15

       0.25

Total

1,500

12,493

Source  Clean Energy Australia report 2011, Clean Energy Council

a) This does not include Victoria’s one third share of Snowy capacity

Andrew Herington is a Melbourne freelance writer who previously worked as a Ministerial Adviser in the Brumby Government