Perspectives on Renewable Energy
       in Australia and Europe



                 Michael Williamson,
  Principal Strate...
Energy revolutions don’t happen very
often.. ……




We may be in the middle of
one!
Australian Institute of Energy 25 Marc...
Does energy innovation move in cycles?




                                  1838 – sail and coal power
1800 - sail



   ...
Renewable Energy Drivers

        Take your pick……
        > Climate Change
        > Energy scarcity (of traditional foss...
UK Carbon Trust - Achieving success requires
 progress on four different “journeys”
                       Proof of       ...
EU and Australia - comparison
                                               >   500 million population
                  ...
EU and Australia – total primary energy
                                               1.   Oil
                          ...
Australia – a renewable energy policy history
                                               >   1997: Kyoto Commitment 10...
EU and Australia – key points of difference
                                               1. Higher abatement target unde...
Climate Change - Scientific Context
  Global atmospheric concentrations of
  carbon dioxide, methane and nitrous
  oxide h...
Climate Change – Policy Challenge
  Climate change is a diabolical
  policy problem. It is harder
  than any other issue o...
Can We Understand and Manage Non-
linear Climate Systems?
     Humans are ill-equipped to
     deal with non-linear
     p...
Seven issues in the renewable
       energy landscape in the coming
                  decade




Australian Institute of E...
1. Peak Oil

‘the point in time
when the
maximum rate of
global petroleum
extraction is
reached, after
which the rate of
p...
2. Cost of Renewable Energy




Australian Institute of Energy 25 March 2010
Cost of New Entrant Power Stations 2009
                                                                                  ...
3. The Merit Order Effect
        >       Renewable energy inputs displace the most expensive forms
                of gen...
4. Competition from Nuclear as a Zero
Emissions Source
>      Nuclear debate revived at the end of the last
       decade
...
5. Managing the grid and ‘weather
dependent’ renewables
> Existing grid operation built on
  dispatchable fossil fuel sour...
Desertec and the Super Grid




Australian Institute of Energy 25 March 2010
6. Politics and Geopolitics




Australian Institute of Energy 25 March 2010
7. International Climate Frameworks,
Science and the IPCC




Australian Institute of Energy 25 March 2010
Conclusions

   > We are on a 50 year transition to 100% renewable
     and low emission energy
   > Europe and Australia ...
In Closing….




If nothing else, our success in
developing renewable energy
may play a part in lifting 3
billion people o...
Thank You
                Michael.williamson@sustainability.vic.gov.au




Australian Institute of Energy 25 March 2010
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AIE Renewable Energy Australia and Europe Mar10

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AIE Renewable Energy Australia and Europe Mar10

  1. 1. Perspectives on Renewable Energy in Australia and Europe Michael Williamson, Principal Strategic Adviser – Sustainable Energy, Sustainability Victoria
  2. 2. Energy revolutions don’t happen very often.. …… We may be in the middle of one! Australian Institute of Energy 25 March 2010
  3. 3. Does energy innovation move in cycles? 1838 – sail and coal power 1800 - sail WW1 – Royal Navy switches from coal to petroleum 2009 – combined wind and petroleum Australian Institute of Energy 25 March 2010
  4. 4. Renewable Energy Drivers Take your pick…… > Climate Change > Energy scarcity (of traditional fossil sources) > Peak oil (future) > Nuclear power phase out > Energy security – risk management > Balance of trade > Emergence of new technologies > Green jobs and green growth > Politics Australian Institute of Energy 25 March 2010
  5. 5. UK Carbon Trust - Achieving success requires progress on four different “journeys” Proof of Proof of Proof of Proof of Proof of Proof of Technology principle concept viability scalability value quality journey (Basic (Applied (Early demon- (Full demon- (Marketable (Warranted research) research) stration) stration) product) product) + Grow 1 or 2 Form venture Bring in first Recruit operational 30+ Company individuals (or new unit) outsider specialists staff employees journey (sweat (Friends & (Angel or seed) (Venture (IPO, (Profit) equity) family) Capital) revenues) No Markets Market Field Early adopt- Rational Technology Market interaction identified trial ers & niches economic & market purchase evolution journey (Technology (Indifference) (Recognition) (Benefit push) quantified) (Market pull) (Feedback) General General Specific General General Regulation Regulation Regulation Regulation Regulation Regulation neutral or neutral positive positive neutral or journey negative positive Australian Institute of Energy 25 March 2010
  6. 6. EU and Australia - comparison > 500 million population > 30% global GDP > 4.3 m km2 > Kyoto target: - 8% > 2007 GHG emissions: 5,045 million tonnes > 22 million population > 1.3% global GDP > 7.6 m km2 > Kyoto target: + 8% > 2007 GHG emissions: 547 million tonnes Australian Institute of Energy 25 March 2010
  7. 7. EU and Australia – total primary energy 1. Oil 2. Gas 3. Coal 4. Nuclear 5. New Renewables 6. Old Hydro 1. Coal 2. Oil 3. Gas 4. Old Hydro 5. New Renewables Australian Institute of Energy 25 March 2010
  8. 8. Australia – a renewable energy policy history > 1997: Kyoto Commitment 108% > 1998-2000: $275 million in support programs > 2001: Renewable Energy Target (extra 2% by 2010) > 2004: more R&D and commercialisation support > 2008: 2020 unconditional GHG target of -5% > 2008: expanded Renewable Energy Target (20% by 2020) > 2008: state based solar feed-in tariffs > 2008-09: Federal $1.35 bn funding for 4 solar power stations, Victorian funding of $100m Australian Institute of Energy 25 March 2010
  9. 9. EU and Australia – key points of difference 1. Higher abatement target under Kyoto (-8% for EU15) 2. Policy focus on heat, electricty and transport fuels 3. Feed-in tariffs to stimulate RE – technology specific 4. Emissions trading scheme operating 1. Allowed an increase of 8% under Kyoto 2. Main policy thrust is on the electricty sector 3. Renewables stimulated by certificate schemes – technology neutral 4. Emissions trading scheme under consideration Australian Institute of Energy 25 March 2010
  10. 10. Climate Change - Scientific Context Global atmospheric concentrations of carbon dioxide, methane and nitrous oxide have increased markedly as a result of human activities. The global increases in carbon dioxide concentration are due primarily to fossil fuel use and land-use change. – the Inter-Governmental Panel on Climate Change Complex non linear physical systems with positive feedback loops Australian Institute of Energy 25 March 2010
  11. 11. Climate Change – Policy Challenge Climate change is a diabolical policy problem. It is harder than any other issue of high importance that has come before our polity in living memory. Climate change presents a new kind of challenge. It is uncertain in its form and extent… It is insidious rather than (as yet) directly confrontational. It is long term rather than immediate… (Garnaut Report, page xviii) Australian Institute of Energy 25 March 2010
  12. 12. Can We Understand and Manage Non- linear Climate Systems? Humans are ill-equipped to deal with non-linear problems Crossing a flooded river requires an understanding of the non-linear relationship between depth, streamflow, hydrodynamic force and overturning moment - Get it wrong and you drown. Australian Institute of Energy 25 March 2010
  13. 13. Seven issues in the renewable energy landscape in the coming decade Australian Institute of Energy 25 March 2010
  14. 14. 1. Peak Oil ‘the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline’ Australian Institute of Energy 25 March 2010 Source: www.theoildrum.com
  15. 15. 2. Cost of Renewable Energy Australian Institute of Energy 25 March 2010
  16. 16. Cost of New Entrant Power Stations 2009 Ops $120 Fuel Victoria wind energy LRMC $100 Capex $80 LRMC $60 $40 $20 $- Black Coal - dry Brown Coal - wet Large CCGT - Vic Large CCGT - cooled cooled NSW Data courtesy SKM 2009, Analysis includes a carbon price of $10 in 2010 rising to $40 in 2030 Australian Institute of Energy 25 March 2010
  17. 17. 3. The Merit Order Effect > Renewable energy inputs displace the most expensive forms of generation > Reduces the pool price of electricty > 2006 German study predicts this exceeds the benefits paid by feed-in tariffs* - valued at €5 bn in 2006 > Theory (partly) confirmed by Sustainability Victoria commissioned 2006 study by McLennan Magasanik Associates^ into greenhouse gas abatement of wind energy > What is the value of the merit order effect in Australia? We don’t know! • Sensfuss, Ragwiz, Genoese, The Merit Order Effect - http://publica.fraunhofer.de/documents/N-67163.html •^ www.sustainability.vic.gov.au/resources/documents/Greenhouse_abatement_from_wind_report.pdf Australian Institute of Energy 25 March 2010
  18. 18. 4. Competition from Nuclear as a Zero Emissions Source > Nuclear debate revived at the end of the last decade > Supporters argue nuclear is a key plank in the climate change response > Critics point to waste, safety and proliferation. > How has technology changed post-Chernobyl, Three Mile Island? > 2010 – Obama administration approved loan guarantee for new US nuclear plant > Australia – not on the agenda in the next 20 years if ever! Australian Institute of Energy 25 March 2010
  19. 19. 5. Managing the grid and ‘weather dependent’ renewables > Existing grid operation built on dispatchable fossil fuel sources > Challenge to integrate and predict wind, solar and wave energy – a new frontier in statistical analysis? > Examples: – European offshore Super Grid – Destertec Project Australian Institute of Energy 25 March 2010
  20. 20. Desertec and the Super Grid Australian Institute of Energy 25 March 2010
  21. 21. 6. Politics and Geopolitics Australian Institute of Energy 25 March 2010
  22. 22. 7. International Climate Frameworks, Science and the IPCC Australian Institute of Energy 25 March 2010
  23. 23. Conclusions > We are on a 50 year transition to 100% renewable and low emission energy > Europe and Australia have both started the transformation > Climate change concerns will underpin this transition in the medium term, but other drivers may take over > Energy revolutions are worth waiting for – lets enjoy this one Australian Institute of Energy 25 March 2010
  24. 24. In Closing…. If nothing else, our success in developing renewable energy may play a part in lifting 3 billion people out of subsistence living. Australian Institute of Energy 25 March 2010
  25. 25. Thank You Michael.williamson@sustainability.vic.gov.au Australian Institute of Energy 25 March 2010

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