World is Green

The Australian states are working hard to compete against each other to come up with more restrictive solar options.

The South Australia government came up with a “net metering feed-in-tariff” which does not provide much incentive compared to a gross metering system.

Now, it is the turn of the Victorian government. Peter Campbell writes about the reasons why this legislation does not make sense. And below, a rally against the tariff.

After visiting the Bali convention on climate change and using their generous travel allowances to see how a good feed in tariff can promote emission reductions and jobs from solar power in countries like Germany, our Victorian Government has delivered a feed in tariff that is crippled and worthless.

My concerns are:

1. The Feed in Tariff is only paid on net metering.

The total electricity generated by panels should be subject to the tariff, as all the clean electricity generated has zero emissions which directly substitutes for coal-fired power and therefore reduces emissions accordingly.

In Germany and other locations where they pay the tariff on gross metering, there has been a dramatic rise in installation of solar power. Germany now has 400 times the solar output of Australia despite having about half our sunshine.

2. The Feed in Tariff has a maximum ceiling of 2kW

This is nonsense. The more solar zero emissions power we generate as a nation the better. This is a critical measure for reducing our emissions to combat climate change. The 2kW array size limit for getting the Feed in Tariff is simply crippling the financial motivation for people to install solar panels, and crippling their payback if they choose to install a bigger array.

3. No certainty for investment is provided

The complexities and restrictions of your feed in tariff resulting from net metering combined with the 2kW ceiling provide no certainty or guarantee for investment in a solar array, unlike gross metering with no ceiling which does. This is evident in countries like Germany where there has been significant investment in solar power - now the equivalent of two coal fired power stations, but with zero emissions.

The Victoria government has stipulated the price at 60c per KwH higher than South Australia’s 44c per KwH.

Peter provides an alternative solution.

I strongly urge the government to modify the tariff to a proven effective and equitable model , which is:

* 60 cents per kWh
* paid for at least 15 years
* paid on the entire output of a system via gross production metering
* no caps on array size and/or outputs.

The Age reports on solar PV cancellations from households

Solar businesses, in a national phone hook-up on Friday, reported that at least five people had already lost their jobs and more were expected to go this week as cancelled orders surge.

From midnight on Tuesday, a family that earns more than $100,000 a year could no longer claim the rebate of up to $8000 on a solar photovoltaic system for their home.

The Clean Energy Council told The Sunday Age that one company had 98% of orders abandoned. The biggest impact has been in cities, where 50-70% of orders were being ditched, leaving companies with millions of dollars of lost business.

As previously noted, this clearly shows the effect of public policy and subsidy for the solar industry. As feed-in-tarriff’s, a mechanism which has produced good results in Europe, is not being aggressively pursued in Australia, this rebate is the only meaningful subsidy for the solar PV industry.

However, all is not lost. The Rudd labour government has announced a Green Loan program.

Around 200,000 households on up to $250,000 a year will be able to take advantage of the program which will offer loans of up to $10,000, with interest capped at the inflation rate, for green products aimed at making established homes more energy and water efficient.

The program would come into effect in January 2009 and run until 2012-13 but Mr Rudd flagged Labor would consider expanding it if it proved successful
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“(This is so) working families can install solar panels or rainwater tanks or roof insulation or solar hot water systems or high efficiency gas hot water heaters … or awnings or grey water recycling systems and energy efficient lighting,” he said.

We need to see how this industry will perform in the coming months and whether there will be a change in policy.

John Connor, CEO of the Climate Institute, writes in Crikey of the negative consequences of the budget for the energy and environmental industry.

The most important in our view was the failure to allocate any funding to the Renewable Energy Fund in the coming financial year, particularly as a number of drilling projects important to the development of the geothermal clean energy option were relying on funding this year. This has sent share prices tumbling and the Government scrambling to assure this industry they’ll be supported through the other “green energy fund”, the Energy Innovation Fund, or assurances for the following financial year. The only explanation for this blooper is that the efforts to hoover up as big a surplus as possible led to this hoovering of credibility.

That the main public heat has surrounded the means testing for the solar rebate demonstrates both the public backing for solar initiatives, and the precarious nature of rebates (and subsidies) as policy solutions. The visiting German Environment Minister observed that if you want to encourage solar PV rollout, a better policy instrument for unlocking longer term opportunities is guaranteed feed-in tariffs for electricity generation post installation. It’s clear that the rebate system has fed a boom. It is also clear that restricting the rebate to $100,000 pa households is causing something of a bust, especially for those businesses relying solely on the rebate program for their income. There are separate and relatively substantial pots of money for solar cities and solar schools initiatives that may allow a softer landing for the existing industry but the real spotlight should be on developing a consistent national feed-in tariff strategy for solar and other low emission sources that will not be captured by the Renewable Energy Target to make sure Australia has a diverse portfolio of clean energy options in 2020.

Mungo MacCallum writes on Crikey about Dr. Nelson, the leader of the Liberal party in Australia on his budget reply speech suggestion of a decrease in excise duty of 5c per litre of petrol.

There are some policy proposals which are so bad that they are unforgivable, and this is one of them. At the most superficial level it is meaningless populism: a five cent cut now would save the average family less than $5 a week and would be quickly absorbed by future price movements anyway. But at a deeper level it contradicts the entire thrust of sensible fiscal and energy policy.

Petrol in Australia is still relatively cheap compared to most of the world, especially Europe, and we still use far too much of it. Because it is a non-renewable and increasingly scarce resource, and a major contributor to climate change as well, we should be trying to wean people off it. By announcing that if punters whinge loudly enough the government can and will bring the price down, Nelson is sending all the wrong signals.

And it isn’t even an original idea: John Howard did it when he was in trouble at the beginning of 2001, but wisely resisted pleas for an encore for the next seven years. Nelson’s move, against all advice, is appalling policy and is now turning into bad politics as well. And by making it, he may well have added himself to the budget’s short but vocal list of losers

Even though we can understand the need for Dr. Nelson to propose a election style stunt in his budget reply speech, this is outright scandalous regarding his economic credentials and provides a glimpse of the climate change policy that can be expected if the Liberal party is elected again.

This electricity must meet a number of important criteria. It must be affordable: New electricity generation should cost at most about 10 cents per kilowatt hour, a price that would probably beat nuclear power and would certainly beat coal with carbon capture and storage, if the latter even proves practical on a large scale. The electricity cannot be intermittent and hard to store, as is energy from wind power and solar photovoltaics. We need power that either stays constant day and night or, even better, matches electricity demand, which typically rises in the morning, peaks in the late afternoon, and lasts late into the evening.

This carbon-free electricity must provide thousands of gigawatts of power and make use of a low-cost fuel that has huge reserves accessible to both industrialized and developing countries. It should not make use of much freshwater or arable land, which are likely to be scarce in a climate-changed world with 3 billion more people.

Solar electric thermal, also known as concentrated solar power (CSP), meets all these criteria. A technology that has the beauty of simplicity, it has proved effective for generations. As the Web site of CSP company Ausra illustrates, solar thermal has a long and fascinating history.

The key attribute of CSP is that it generates primary energy in the form of heat, which can be stored 20 to 100 times more cheaply than electricity — and with far greater efficiency. Commercial projects have already demonstrated that CSP systems can store energy by heating oil or molten salt, which can retain the heat for hours. Ausra and other companies are working on storing the heat directly with water in the tubes, which would significantly lower cost and avoid the need for heat exchangers.
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Since all three remaining presidential candidates endorse a cap on carbon dioxide emissions coupled with a system for trading emissions permits, carbon dioxide will likely have a significant price within a few years. And that means the economics of carbon-free CSP will only get better. Improvements in manufacturing and design, along with the possibility of higher temperature operation, could easily bring the price down to 6 to 8 cents per kilowatt hour.
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CSP makes use of the most abundant and free fuel there is, sunlight, and key countries have a vast resource. Solar thermal plants covering the equivalent of a 92-by-92-mile square grid in the Southwest could generate electricity for the entire United States. Mexico has an equally enormous solar resource. China, India, southern Europe, North Africa, the Middle East and Australia also have huge resources.