PDC: Solar tariff working group

This Working Group (WG) was established by the Policy Development Committee (PDC) on 23 January 2013.

Working group report
This working group was tasked with developing policy to implement a national energy scheme. The working group was chaired by Mark Gibbons and will present the following policy text to the March 20 PDC meeting.

Recommendation
As per the MAUT decision table for the Energy Policy Working Group, we recommend the institution of the following measures to build Australia's renewable energy base.

Preamble
Australia has vast untapped renewable energy sources which offer powerful long-term benefits in the fields of climate change and energy security. However, current renewable policy settings merely create the appearance of action, and amount to little more than a confidence trick being played on the public.

Three areas of energy generation need to be examined intensively: electricity (which accounts for around 10% of total energy generation in Australia), liquid fuels (accounting for slightly more), and coal exports, which account for the majority[1]. The Renewable Energy Target (RET) creates a minuscule effect on overall power generation as it applies only to electricity. It imposes a disproportional cost on household energy use and does nothing to curb emissions from fuel and oil[2]. Emissions from fuel and oil are likely to increase as rising prices provide incentives for the use of highly emissions intensive coal-to-liquid transfers.

Coal exports are expected to increase substantially over the next 10 years[3], generating short-term income, but creating carbon emissions on a scale to dwarfs any domestic emissions reductions. Our dependence on coal is becoming steadily more entrenched, with the rising global price now forcing governments to subsidize the fossil fuel industry to the tune of more then $12.2 billion a year to keep domestic prices down[4]. This subsidy easily outstrips our collective investment in renewables. Meanwhile, Australia's electricity grid is deteriorating and will require investment of over $100 billion in the medium term.[5] However, the necessity of imminent investment in Australia's power grid presents a rare opportunity to redesign Australia's energy model.

Electricity generation can be made wholly renewable by adopting the recommendations of the ZCA2020 Stationary Energy Plan. This report was produced by a panel of leading scientists and provides a detailed and viable 10-year plan for rolling out concentrated solar thermal plants and wind farms in sufficient scale to entirely replace the existing coal-fired power network[6]. Such a roll-out would create over 150,000 jobs, and the assembly and construction involved are well within Australia's industrial capacity[7]. The project will create much-needed stimulus for the manufacturing and construction industries—both of which have suffered harsh downturns in recent years. The bulk of funding can be obtained through the sale of completed power assets, and by incorporating existing funding and revenue for renewables. And as the Snowy River Hydro scheme shows, the benefits of large-scale energy investment are significant in the longer term[8].

More small-scale solar PV will assist in energy provision by taking pressure off power generation during the day, allowing more energy to store. While solar PV is supported currently, the effectiveness of the support is compromised a lack of consistency across states, and continual changes, which create a "solar-coaster" effect and undermine certainty. Australia's share of the solar PV market has plunged from around 7 per cent in 1991 to 1 per cent in 2008[9]. Global best practice suggests the use of a harmonized national tariff which covers businesses and community groups as well as households[10].

A Renewable Fuel Target, modeled on the successful UK scheme, will provide a market mechanism to drive investment in low-emission bio fuels[11]. However, plans to increase Australia's coal exports must be re-considered, as reducing domestic use of coal has no global effect if coal production is merely exported instead, or if export growth occurs a rate which overwhelms domestic cuts. New coal exploration must be subject to a temporary moratorium until Carbon Capture and Storage technology (CCS) is viable and commercial, and we will encourage private interests to develop the technology on that basis. The impact on communities can be averted though the creation of renewable energy job opportunities in areas where coal mines and refineries are currently located.

This mix of stimulatory state investments and market price mechanisms can drive change in the necessarily magnitude without imposing excessive short-term squeeze on energy prices. Australia has the capacity and technology to curb its emissions in the time-frame urged by the scientific community, and the change can be done in ways that create jobs and free us from high and rising fossil fuel prices for good. All that is needed is political will.

Policy text
The Pirate Party proposes the following measures to cut carbon emissions and improve Australia’s economic resilience.

Institute a construction project to build a renewable energy grid over 10 years, in line with ZCA2020 Stationary Energy Plan recommendations.
 * Generation of 195TWh/yr baseload power can be accomplished through construction of 12 Concentrated Solar Power (CSP) plants.
 * Each plant will house sizable molten salt storage facilities and utilize 18,000 heliostats.
 * Waste biomass co-firing can be incorporated to provide backup power.
 * Facilities will be positioned in areas of marginal land with high solar exposure.
 * Modular designs will maximize replication and economies of scale.
 * Generation of 130TWh/yr additional baseload power can be accomplished through deployment of additional wind turbines.
 * Use of large turbines and separation into 23 geographic sites will counter localized variability.
 * Upgrade and maintenance of the electricity grid can be conducted in a way that facilitates large scale renewables through:
 * Installation of high-voltage transmissions from CSG plants
 * Installation of plug-in connections from power generators
 * Interconnection of grids
 * Upgrades in transmissions technology, incorporating HVDC and HVAC
 * Inclusion of more active demand-side load management, including SmartGrid systems.
 * Funding arrangements can be managed to ensure that the full cost of the project (estimated at $370 billion over 10 years)[12] is met without the accumulation of long-term debt. These measures will include:
 * The sale of completed power generation assets
 * A $2/week household energy levy (raising approximately one-quarter of revenue required over the duration of the scheme)[13]
 * This levy will include a sunset clause, cancelling it on completion of the project.
 * The existing RET will be removed to offset cost pressures on households.
 * Incorporation of the initial $10 billion allocated to the Clean Energy Finance Corporation, as well as existing ARENA funds, and
 * Revenue raised through the carbon price.
 * The carbon tax will be maintained in current form until completion of the project, and then removed.
 * Governance arrangements will provide expert oversight and accountability.
 * An independent Energy Transition Organisation (ETO) will be set up to oversee construction of the new energy grid.
 * The ETO will receive a single up-front grant and will be responsible for allocating funds over the subsequent 10 years in an efficient, systematic and effective manner.
 * This organisation will absorb the duties and staff of the Clean Energy Finance Corporation.
 * Remaining funds following asset sales will be returned to general revenue.

Improve incentives and mechanisms to reduce electricity demand and increase efficiency.
 * Enhance and unify solar PV incentives to increase power generation in the community.
 * Work through COAG to centralize funding arrangements for solar feed-in tariffs and apply a uniform nationwide scheme.
 * Net metering can be replaced with gross metering.
 * A single compliance and regulation regime will apply to solar companies.
 * Best practice recommendations from the Australian Solar Council can be adopted including a stronger compliance regime, improved staff development and training, and a "trust mark" program to assist consumers in identifying reliable companies.
 * Extend solar tariffs from existing coverage (households only), to include businesses and community groups.
 * Guarantee tariff rebates for 20 years and guarantee a 15 year payback period.
 * Review building standards to seek compliance with 10-star global best practice.

Phase out subsidies to fossil fuel industries.
 * Phase-out will conclude on the completion of the new energy grid.

Enact market-driven solutions to reduce emissions from oil and energy exports.
 * Institute a Renewable Fuel Target (RFT) on oil to drive investment in more efficient fuels and aid take-up of electric cars and efficient appliances.
 * Target 50% renewable fuels by 2030.

Prevent emission exports by curbing new coal developments.
 * Ban development or expansion of coal fired power stations.
 * Apply a moratorium on new and expanded coal mines.
 * This moratorium will be lifted in when effective carbon capture and storage technology (CCS) is made commercially available. Sales of coal from new or expanded mines may then commence subject to agreement from the purchaser to utilize CCS.

[1] Pearse, Comment: Renewable Energy, February 2011, http://www.themonthly.com.au/renewable-energy-comment-guy-pearse-2988 (Accessed March 15 2013)

[2] Pearse, Comment: Renewable Energy, February 2011, http://www.themonthly.com.au/renewable-energy-comment-guy-pearse-2988 (Accessed March 15 2013)

[3] Bureau of Resources and Energy Economics, Australian bulk commodity exports and infrastructure – outlook to 2025, July 2012, page 56, http://www.bree.gov.au/documents/publications/_other/export-infrastructure-report.pdf (Accessed March 15 2013)

[4] Morton, Billions spent on fossil fuel incentives, March 1, 2011, http://www.smh.com.au/environment/billions-spent-on-fossil-fuel-incentives-20110228-1bbsn.html (Accessed March 20 2013)

[5] Pearse, Comment: Renewable Energy, February 2011, http://www.themonthly.com.au/renewable-energy-comment-guy-pearse-2988 (Accessed March 15 2013)

[6] Beyond Zero Emissions, ZCA2020 Stationary Energy Plan, August 2011, Page 13, http://media.beyondzeroemissions.org/ZCA2020_Stationary_Energy_Report_v1.pdf (Accessed March 16 2013).

[7] Beyond Zero Emissions, ZCA2020 Stationary Energy Plan, August 2011, Page xix, http://media.beyondzeroemissions.org/ZCA2020_Stationary_Energy_Report_v1.pdf (Accessed March 16 2013).

[8] Bureau of Resources and Energy Economics, Energy in Australia 2012, Page 44, http://www.bree.gov.au/documents/publications/energy-in-aust/energy-in-australia-2012.pdf (Accessed March 16 2013).

[9] Gregg, Feed In Tariffs – The Devil Lies In The Details, 13 May 2011. http://www.shapingtomorrowsworld.org/greggfeedins.html (Accessed 20 February 2013).

[10] Access Economics, The Economics of Feed-in Tariffs for solar PV in Australia, Pages 4-8

Gregg, Feed In Tariffs – The Devil Lies In The Details, 13 May 2011. http://www.shapingtomorrowsworld.org/greggfeedins.html (Accessed 20 February 2013).

Renewables International, Merit order effect of PV in Germany, http://www.renewablesinternational.net/merit-order-effect-of-pv-in-germany/150/510/33011/ (Accessed 6 March 2013)

[11] European Renewable Energy Council, European Renewable Energy Policy Review, http://www.erec.org/fileadmin/erec_docs/Projcet_Documents/RES2020/UK_RES_Policy_Review_09_Final.pdf (Accessed March 14 2013)

http://www.thebioenergysite.com/articles/717/uk-hitting-renewable-road-fuel-target

[12] Beyond Zero Emissions, ZCA2020 Stationary Energy Plan, August 2011, Page 116, http://media.beyondzeroemissions.org/ZCA2020_Stationary_Energy_Report_v1.pdf (Accessed March 16 2013).

[13] Beyond Zero Emissions, ZCA2020 Stationary Energy Plan, August 2011, Page 116, http://media.beyondzeroemissions.org/ZCA2020_Stationary_Energy_Report_v1.pdf (Accessed March 16 2013).

[| MAUT table link]

'''Got feedback or suggestions? Send us an email at policydev@pirateparty.org.au.'''

Meeting Schedule
This working group has concluded the drafting process and no further meetings are currently scheduled.