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Submission to: “Review of the Renewable Energy Target”, Expert Panel, Call
for Submissions, 5 April 2014
I would like to state my support for the Renewable Energy Target (RET), in
particular for the Small-scale Renewable Energy Scheme (SRES).
General
My main points to the review document are:
1) The Small-scale Renewable Energy Scheme (SRES) for solar photovoltaic
(PV), solar water heaters (SWH) and heat pump water heaters has allowed
the general public to participate in the RET ("Mums and Dads" who invest
into their own generating/electricity displacing capacity). This has the
benefit of making the public more involved and interested in energy
efficiency.
2) The installation of PV panels and SWHs reduces electricity network peak
demands, as peak demand (e.g. for air conditioning) tends to coincide with
peak output from solar PV panels and SWH. Since peak demand has a
significant effect on electricity cost, the installation of PV and SWH has an
electricity cost reducing influence, which should offset at least part of the cost
for the Small-scale Renewable Energy Scheme (see below for more detail).
3) As inefficient electric storage water heaters have not been phased out, the
Small-scale Renewable Energy Scheme plays an important role in reducing
the initial purchasing cost difference between solar & heat pump water
heaters and inefficient electric water heaters. Reducing or abandoning the
SRES would almost certainly increase the use of electric water heaters and
decrease energy efficiency.
I would like to substantiate the above point #2. In your review document it is
stated that the cost impact of the RET for the electricity consumer is in the order
of 3 to 5% (Section 3.4). However, I believe this cost does not include the cost
benefit of the peak electric load reduction by the Small-scale Renewable Energy
Scheme.
A recent Australian Senate report [1] states: “some 25 per cent of retail
electricity bills are required to meet around 40 hours of critical peak demand
each year” (see Section 3.22). A recent Western Power study on the impact of
photovoltaic generation on peak electricity demand [2], on the other hand, says
that in WA the “continued growth in the number of PV systems is estimated to
reduce the system peak by 2.95% (135 MW) in 2017” (see page 5).
As satisfying top peak electricity demand is extremely expensive, this suggests
the Small-scale Renewable Energy Scheme costs are at least partly offset by the
additional supply of renewable energy during peak load times (indeed ref. [3]
suggests that the cost for the consumer of the RET scheme is less than 1% (or
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$15) per year (see page 18) and the Australian Solar Council even suggests the
SRES on its own reduces the electricity cost by 0.8%1 [4]).
I believe it is very important that the RET committee includes the cost reduction
provided by the additional supply of renewable energy during peak load times
by the SRES and considers ref. [5].
Answers to specific questions from the review document
How has the RET performed against the objectives in the Renewable Energy
(Electricity) Act 2000?
In my understanding the objectives of the act are being met. The RET is certainly
achieving additional generation and electricity displacement from renewable
energy. As a result there is greater use of more environmentally sustainable
energy sources and participation of the general population in the RET (see
comment #1 above).
Are there more efficient and effective approaches to achieving these objectives?
I believe the current RET framework is efficient and effective. As I understand it,
the RET does not rely on tax payer funding and it encourages private investment
into electricity generating capacity and electricity displacement.
Do the objectives of the Act remain appropriate, in light of falling electricity
demand and the Government’s target and policies for reducing greenhouse gas
emissions?
I do not understand this question, as it asks if the RET is still appropriate
because it is achieving its objective (reducing the electricity demand and
greenhouse gas emissions)?
How has the RET influenced the development of the renewable energy industry?
The RET is increasing the quality and performance of the renewable energy
products offered by industry. It also encourages the Australian development of
new energy technologies.
Do small-scale renewable energy systems still require support through the SRES? If
so, for what period will support be required for?
Yes, small-scale renewable energy systems still require support. The SRES
impact on the electricity costs currently appears to be near cost neutral (see also
ref [5]). According to your review document the SRES employs around 17,000
people and enables of the wider Australian population to participate in the
scheme. Reducing or discontinuing the SRES would result in a loss of expertise &
The -0.8% contribution of the SRES to the residential electricity price increases also
appears in the 2011 AEMC report on “Retail electricity price estimates” [5].
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manufacturing (e.g. solar water heater manufacturers) and a loss in momentum
to move to cleaner more efficient energy sources. The SRES appears to be a
particularly successful part of the RET and should be allowed to continue as
planned (see also point #3 above).
Harry Suehrcke
15 May 2014
References
[1]
The Senate, Select Committee on Electricity Prices, Reducing energy bills
and improving efficiency, Section 3.22, November 2012 (see:
http://www.aph.gov.au/~/link.aspx?_id=D3162996DBB04099B6835FD018B4C
E16&_z=z).
[2]
Jones, B., Nigel, W. and Lark, A., Western Power, Study on the impact of
Photovoltaic (PV) generation on peak demand, page 5, 5 April 2012 (see:
http://www.westernpower.com.au/documents/reportspublications/Photovolta
ic_Forecast_Public_Version_2012.pdf).
[3]
Australian Government response to the Senate Select Committee on
Electricity Prices report: Reducing energy bills and improving efficiency, page
18, June 2013 (see:
http://www.innovation.gov.au/Energy/EnergyMarkets/Pages/ReducingEnergy
BillsImprovingEfficiency.aspx).
[4]
Australian Solar Council, “In 2015/16 household solar will $ave all
Australians more than it costs” (see: http://solar.org.au/infographics/save-onbills/).
[5]
Australian Energy Market Commission (AEMC), Retail electricity price
estimates 2010-2011 to 2013-2014, page 2, December 2011 (see:
http://www.aemc.gov.au/Media/docs/Information%20sheet-b6ea33d3-73c84e89-b767-d619f3149d3e-1.PDF).