Tag Archives: The Conversation

renewable energy

Renewable energy is getting cheaper

The stars are aligning for Australia to transition to 100% renewable energy. Our fossil fuel infrastructure is ageing, which means we will soon need to invest in new power generators. New technologies such as battery storage could revolutionise long-standing business models. With care, the transitions away from fossil fuels could offer greater job opportunities.

Our latest research, which corroborates previous work, shows the technology already exists to solve many of the remaining questions around technological capability. For instance, the fact that wind and solar don’t generate electricity when the wind isn’t blowing and the sun isn’t shining can be dealt with by installing a network of diverse generators across a wide area, or by increasing our use of energy storage.

One of the biggest remaining barriers to transition is cost. But this is also rapidly changing. Much work is going into reducing the cost of renewable energy, including the latest funding announcement from the Australian Renewable Energy Agency (ARENA) of A$92 million for 12 solar projects.

The cost of building renewable energy

The cost of renewable energy is highly variable across the world and even within Australia. The picture is not simple, but it does help to start by looking at the big picture.

Average capital costs of constructing new wind, solar PV and ocean/tidal generators are already lower than equivalent coal generation infrastructure.

Research suggests that, overall, the cost of moving to 100% renewable energy is not significantly higher than the cost of hitting a lower target.

The capital cost of investment in renewable energy generation technologies is also falling rapidly. In its 2014 report on global renewable power generation costs, the International Renewable Energy Agency (IRENA) showed that the total cost of installation and operation over a lifetime of small-scale residential PV systems in Australia has fallen from US$0.35 to US$0.17 per kilowatt-hour between 2010 and 2014.

In part this has been because of reduced installation costs, together with our exceptional abundance of sunshine.

As a result, Australian new residential solar installation has soared to the fifth highest in the world. Installed capacity accounts for 9% of national electricity generation capacity and 2.8% of electrical energy generation.

The historical reductions in installation costs for wind energy are similar globally and in Australia. Recent 2016 reverse auctions in the Australian Capital Territory have received Australia’s lowest known contract price for renewables with bids at A$77 per megawatt-hour.

Beyond building

But the capital cost of building generation infrastructure is not the whole story. Once the generator is built, operations and maintenance costs also become important. For most renewables (biomass excluded) the fuel costs are zero because nature itself provides the fuel for free.

Other costs that we must consider are variable and fixed costs. Fixed costs, such as annual preventative maintenance or insurance, don’t change with the amount of electricity produced. Variable costs, such as casual labour or generator repairs, may increase when more electricity is produced.

The variable costs for some renewables (biomass, hydropower and large-scale solar PV) are lower than coal. For other renewable technologies they are only slightly higher. Fixed costs for almost all renewable technologies are lower than for coal.

We also need to think about costs beyond individual generators. The vastness of our Australian continent is a bonus and a challenge for building 100% renewable energy.

It can be used strategically to give a 100% renewables supply reliability by using an interconnected network of generators. For instance, it may be very sunny or windy in one region. Excess electricity produced in this region can fill a gap in electricity demand in less sunny or windy places elsewhere.

But this also poses challenges. To take advantage of the reliability that a highly distributed renewable electricity system can provide, we must also consider the costs associated with expanding the transmission network.

For example, in our research we investigated one possible 100% renewables electricity scenario. This was conservatively based on current technology and demand (conservative because technology is likely to change, and electricity demand has been unexpectedly falling). The scenario required a transmission grid two-and-a-half times larger than our current grid, including new cross-continental linkages between Western Australia and the Northern Territory, which currently stand alone from the well-integrated eastern Australian networks.

The challenges of transitioning to a renewable electricity sector are no doubt great, but our ageing generator infrastructure means that an overhaul will soon be due. Even though the price of electricity from old coal power plants is currently cheaper than that from many new renewable plants (because the former are already paid off), cost reductions mean a strong business case now exists for renewable technologies investment.

In a recent article on The Conversation, John Hewson wrote that “renewable energy is one of our most ‘shovel ready’ business opportunities”.

Now is the time to pre-empt the looming deadline for infrastructure overhaul to ensure future economic resilience for Australia.

– Bonnie McBain

This article was first published by The Conversation on September 8 2016. Read the original article here.

Australian research funding

Australian research funding infographic

Featured image above: CSIRO has received significant budget cuts in recent years. Credit: David McClenaghan

The election is rapidly approaching, and all major parties – Liberal, Labor and Greens – have now made announcements about their policies to support science and research.

But how are we doing so far? Here we look at the state of science and research funding in Australia so you can better appreciate the policies each party has announced.

The latest OECD figures show that Australia does not fare well compared with other OECD countries on federal government funding research and development.

As a percentage of GDP, the government only spends 0.4% on research and development. This is less than comparable nations.

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But looking at total country spending on research and development, including funding by state governments and the private sector, the picture is not so bleak: here Australia sits in the middle among OECD countries.

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Over the years, there have been hundreds of announcements and new initiatives but this graph indicates that, in general, it has been a matter of rearranging the deck chairs rather than committing to strategic investments in research.

The Paul Keating Labor government made some investments. During the John Howard Liberal government’s years, there were ups and downs. The Kevin Rudd/Julia Gillard Labor governments were mostly up. And in Tony Abbott’s Liberal government, the graph suggests that it was mostly down with science.

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Over the past decade, there have been some minor changes in funding to various areas, although energy has received the greatest proportional increase.

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This pie chart reminds us that the higher education sector is a major provider of research and is highly dependent on government funding. It also tells us that business also conducts a great deal of research.

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The timeline below shows that the government does listen and respond when issues arise. It has recognised the importance of the National Collaborative Research Infrastructure Scheme (NCRIS), the Australian Synchrotron and sustainable medical research funding by different initiatives.

But, sadly, one must remember that funding is effectively being shifted from one domain to another, and it has seldom been the case that significantly new commitments are made. The balance of red and blue shows how one hand gives while the other takes funding away.

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This useful graph highlights the fact that Australian Research Council (ARC) funding now amounts to little more than the National Health and Medical Research Council’s funding.

This is remarkable, given that the ARC funds all disciplines, including sciences, humanities and social sciences, while the NHMRC essentially focuses on human biology and health.

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This graphic also highlights the lack of any sustained funding strategy. The only clear trend is that the investment in the ARC has gradually declined and the NHMRC has grown.

This, in part, reflects the undeniable importance of health research. But it is also indicative of effective and coherent organisation and communication by health researchers. This has been more difficult to achieve in the ARC space with researchers coming from a vast array of disciplines.

– Merlin Crossley, Deputy Vice-Chancellor Education and Professor of Molecular Biology, UNSW Australia
– Les Field, Secretary for Science Policy at the Australian Academy of Science, and Senior Deputy Vice-Chancellor, UNSW Australia
This article was first published by The Conversation on June 22 2016. Read the original article here.
COP21

Which businesses are at COP21 and why?

The 21st meeting of the Conference of the Parties (or COP21) is underway, with the goal of hammering out a deal to reduce global carbon emissions top of the agenda.

As well as leaders from 147 countries, there are a number of CEOs and senior managers of the world’s biggest corporations, industry associations and trade policymakers also present among the 50,000 attendees.

Business has a significant stake in the talks. Company representatives will play a key role in shaping the agenda and there are more than 180 business events planned in Paris.

The UN climate chief Christiana Figueres has called for “business involvement at the highest levels” at COP21, while UK prime minister, David Cameron, called for a stronger role for business in his address.

Climate change is “too large for governments alone to deal with” and businesses need “long-term certainty for investment,” he said.

So which are the businesses that participate in COP meetings? Will COP21 result in meaningful action by business or will it be another massive greenwashing exercise under the benevolent gaze of the United Nations?

Renewables and tech

While a wide range of industry sectors participate at COP meetings the usual suspects are not hard to identify.

First, there are the “good guys” – companies in the renewable energy business and technology companies offering products and services for environmental protection, energy efficiency, water and soil conservation, and “clean agriculture”.

Then, there are the “bad guys” – oil and gas companies, mining corporations, electricity generators and other fossil fuel-based industries, eagerly promoting their green credentials.

COP21
One of the good guys? Bill Gates promoting innovation at COP21. EPA/Ian Langsdon/Pool

But perhaps the most influential groups are the various industry and trade associations that directly and indirectly lobby policy makers.

Industry associations such as the Confederation of European Paper Industries, European Steel Association, European Association of Metals and the International Association of Oil and Gas Producers regularly lobby EU climate policy makers, advocating business friendly policies.

They also provide technical advice on their preferred climate policies, mobilise support from other industry associations and organise meetings and dinners between CEOs and policy makers.

A recent report by the Policy Studies Institute found that 77% of the Fortune 500 corporations lobbied climate policy makers through their trade associations.

Global carbon price

Every corporation, industry association, and myriad “responsible business” coalitions appear to agree that what business needs to agree on above all else is a global carbon price.

The economic logic is that a carbon price can incentivise low carbon innovation and provide a stable policy framework for business.

The problem of course is that a price on carbon and emissions trading, while being cost effective and efficient for business, will have little if any effect on absolute greenhouse emissions.

This is because it will take a relatively high carbon price (to the order of US$30–US$40 per ton according to experts) to shift investments to cleaner energy sources.

With the current price of carbon under the EU’s Emissions Trading Scheme languishing at around US$6 a ton though, there is little incentive for companies to make these investments.

Plus, a price on carbon simply serves to raise the cost of fossil fuel energy and does nothing to lower the costs of alternative energy sources. All the major oil companies have internal carbon prices in place, yet they continue to invest in fossil fuels.

The likely result

COP21 will likely see businesses set aspirational goals committing to move to 100% renewable energy sources, they will make numerous climate pledges, and they will mobilise support for carbon pricing and emissions trading.

But there will be no concrete commitments or deadlines.

Business can already boast its support for COP21. A consortium of companies has given £25 million to the conference – for which it has taken flak from green groups.

Sponsors include some of the largest carbon emitters in the world: EDF Energy, Engie (which accounts for nearly half of France’s annual carbon output), Air France (which has opposed emissions reductions in the aviation sector), and BNP Paribas (one of the top ten global coal lending banks during 2005–2013). BMW, Coca-Cola and BT are also sponsors of the event.

Ultimately business involvement at COP21 will ensure there is no “distortion of competitiveness in the global market” as the International Chamber of Commerce Climate Working Group puts it.

And as long as business-friendly proposals continue to define climate policy, as they have in the past, there can never be any meaningful climate action.

Business as usual will continue, despite all the pledges and climate summits. Climate policy, friendly or otherwise, needs to drive business if new business models are to emerge – not the other way round.

Otherwise, as environmentalist Bill McKibben warns us “even before we run out of oil, we will be running out of planet”.

This article was first shared by The Conversation on 2 December 2015. Read the original article here.