Energy White Paper 2014 –
Issues Paper submission template
Details of person making the submission
First Name
Colin
Surname
Liebmann
Country (if not Australia)
Australia
State
NSW
Company or Organisation (if relevant)
Recurrent Energy
Position in Organisation (if relevant)
Acting Vice President, Australasia
Type of Organisation. Please choose from the
dropdown list right
Company – Generator
Sector. Please choose from the dropdown list
right
Electricity, Gas, Water and Waste Services
Email. Please provide an email address if you
would like to receive updates from the Energy
White Paper Taskforce
Confidentiality
Submissions may be published on the Department of Industry website.
If you do not wish to have your submission made public, please tick the box.
Issues for comment are listed against each of the Chapter Headings. In making your submission, you
are welcome to make comment against some or all of issues in the fields provided. A field for general
comments is provided at the end of the template.
Input Fields for Energy White Paper – Issues Paper submission template
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1. The Security of Energy Supplies
The Government seeks comment on:

ways community expectations can be better understood and reflected in reliability standards;

the value of developing fuel reserves to meet Australia’s international oil security obligations, and augment
domestic security;

ways to increase new gas sources to meet demand and measures to enhance transparency in market
conditions; and

issues relating to the regulation of energy infrastructure.
Please provide any comments on The Security of Energy Supplies below:
2. Regulatory Reform and Role of Government
The Government seeks comment on:

priority issues, barriers or gaps within the COAG energy market reform agenda;

possible approaches and impacts of review of tariff structures including fixed network costs, further time-ofuse based electricity tariffs and the use of smart meters;

possible measures to promote greater price transparency in gas markets; and

areas where further privatisation of government-owned assets would contribute to more effective regulatory
frameworks and better outcomes for consumers.
Please provide any comments on Regulatory Reform and Role of Government below:
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3. Growth and Investment
The Government seeks comment on:

commercial or market initiatives that could enhance growth and investment in the energy and resources
sectors;

areas where approvals processes could be further streamlined while maintaining proper environmental and
social safeguards;

further ways that regulatory burdens could be reduced while maintaining appropriate levels of disclosure and
transparency in energy markets; and

the impacts of variable land access policy and ways the community could be better informed and engaged on
development in the energy sector.
Please provide any comments on Growth and Investment below:
4. Trade and International Relations
The Government seeks comment on:

how to grow the export of value-added energy products and services;

ways to remove unnecessary barriers to continued foreign investment in Australia’s energy sector;

ways to strengthen support for access to export markets; and

ways to support business to maximise export opportunities for Australia's energy commodities, products,
technologies and services, including the value of Australia’s participation in the variety of international forums.
Please provide any comments on Trade and International Relations below:
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5. Workforce Productivity
The Government seeks comment on:

the nature of any current skills shortages being experienced and how these could be addressed by and with
industry;

the capacity of industry and education sector-led programs to meet long-term training and skills development
needs of the energy and resources sectors; and

specific long-term training and skills development needs for alternative transport fuel, renewable energy,
energy management and other clean energy industries.
Please provide any comments on Workforce Productivity below:
6. Driving Energy Productivity
The Government seeks comment on:

the current suite of energy efficiency measures, ways these could be enhanced to provide greater energy
efficiency or possible new measures that would enhance energy productivity;

the use of demand-side participation measures to encourage energy productivity and reduce peak energy
use; and

measures to increase energy use efficiency in the transport sector.
Please provide any comments on Driving Energy Productivity below:
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7. Alternative and Emerging Energy Sources and Technology
The Government seeks comment on:

ways to encourage a lower emissions energy supply that avoids market distortion or causes increased energy
prices;

the need to review existing network tariff structures in the face of rapidly growing deployment of grid-backedup distributed energy systems, to ensure proper distribution of costs;

additional cost-effective means, beyond current mandatory targets and grants, to encourage further
development of renewable and other alternative energy sources and their effective integration within the wider
energy market;

how the uptake of high efficiency low emissions intensity electricity generation can be progressed;

any barriers to increased uptake of LPG in private and commercial vehicles and CNG and LNG in the heavy
vehicle fleet; and

any barriers to the increased uptake of electric vehicles and advanced biofuels.
Please provide any comments on Alternative and Emerging Energy Sources and Technology below:
Recurrent Energy is a major solar developer based in California and has one of North America’s largest
solar development portfolios, with more than 880 MW of contracted projects and a 2 GW project
pipeline. Recurrent Energy was one of the first global solar PV developers to establish a presence in
Australia and our local team has been undertaking work on a number of potential project sites around
the country since 2010. Our total Australian pipeline is approximately 1300 MW of which 80 MW is at an
advanced stage of feasibility assessment. We consider our development prospects in Australia to be
world class.
Recurrent Energy welcomes the opportunity to submit its insights from significant global operations,
and contribute its views about the policy settings which will best improve the competitiveness and
increase the supply of renewable energy in Australia.
Recurrent Energy commends the Australian Government for its work in progressing the development of
a White Paper to set out a coherent and integrated approach to energy policy. Specifically, Recurrent
Energy is pleased to provide its views in response to the Government’s request for suggestions on
ways to encourage lower emissions energy supply and encourage the further development of
renewables.
The benefits of large scale solar:
In Recurrent Energy’s view, it is imperative that as Australia’s energy market transforms, Government
policies should be developed to improve the competitiveness and increase the supply of renewable
energy in Australia.
Globally, key international energy organisations continue to warn about the continued dominant use of
fossil fuels and ever-increasing carbon emissions. The International Energy Agency in its Tracking
Clean Energy Progress 2013 Report notes, “Solar PV and wind tech grew by 42% and 19% in 2012, but
coal deployment continues to outpace clean energy.”
Domestically, the situation is trending slowly but positively in terms of CO2 emissions reduction and an
increasing proportion of electricity generation from renewable energy sources. According to the
Bureau of Resources and Energy Economics’ (BREE) Energy in Australia 2013 report, in 2010-11 solar
accounted for 5 per cent of Australia’s total production of renewable energy, representing the smallest
contributor of all renewable sources, despite Australia having the highest average solar radiation per
square metre of any continent and has world-leading capabilities in solar PV research and technology
development. Yet BREE also found that in “2010–11, the strongest growth in renewable energy
production occurred in solar-powered electricity generation, which increased by 204 per cent, albeit
from a small base…Investment in large-scale solar electricity generation is also increasing rapidly”.
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More recent data has supported this analysis. Due in part to the increasing affordability of solar PV
systems, the take up of solar by Australian households has been steadily rising and has contributed to
what has been described as a quiet “solar revolution” (Climate Commission September 2013 report:
The critical decade: Australia’s future – solar energy).
The Climate Commission’s September 2013 report also noted that about 2.6 million people, 11% of
Australia’s population, now use the sun for their electricity needs (relying on data from the ABS and
Clean Energy Regulator), and that by 2050 solar PV has been projected to provide 29% of Australia’s
electricity needs (Department of Resources and Energy Energy White Paper 2012).
Renewable energy generation reduces the demand on gas and other fossil fuel sources and allows for
their alternative exploitation to maximize their economic value – for example exporting. Support for
renewable energy generation is also essential for meeting pressing requirements in terms of both
international (Kyoto) and domestic (RET) goals.
Recurrent Energy believes that large scale solar should remain a high priority renewable technology for
the Government. Australia has the highest average solar radiation per square metre of any continent in
the world and is home to world-class research institutions and capabilities. Australian and global
investment in solar PV technology has delivered significant cost reductions and the technology is well
understood.
Large-scale solar PV offers a reliable, predictable and high-value renewable energy generation profile.
Solar energy production can be forecast with greater accuracy than other intermittent sources and the
solar resource is most abundant during the hours of peak demand during the day, particularly the mid
to late afternoon peaks during summer. Because solar PV has no fuel inputs and very low maintenance
costs, its cost to deliver is fixed over the life of the plant. Solar PV offers a compelling alternative to
other peak energy technologies such as gas whose price is highly volatile and impossible to forecast
over its 35 year life. In this regard, solar PV can deliver high-value energy when it is needed most.
Large scale solar deployed near to load centres can avoid the need for network augmentation. Network
augmentation continues to be the major cause of increases in retail electricity prices and avoiding
future upgrades can reduce upward pressure on families’ electricity bills. Many regional centres
throughout Australia have an excellent solar resource and the existing network has the capacity to
accommodate local solar PV generation. Large scale electricity storage technology is emerging as a
significant development in the energy industry and will make regional generation even more compelling
as an alternative to building new transmission infrastructure. California now has a program to deploy
1.3 GW of storage by 2020 which reinforces the imminent commercial readiness of this technology.
Recurrent Energy advocates the deployment of a diverse portfolio of renewable energy technologies
through the Large Scale Renewable Energy Target (LRET), to contribute to a renewable energy
generation profile that offers greater value to the network. By far the biggest contributor to the LRET
has been wind energy, and modelling by the Australian Energy Market Commission suggests that this
dominance of wind will continue. Recurrent Energy advocates a portfolio which includes technologies
such as large-scale solar to complement wind energy and ensure renewable energy output better
matches the daily and seasonal demands of the market.
A well matched renewable energy output profile is important as it has significant implications for
efficiencies in the National Energy Market. Peak demand in Australia is increasing at over three times
the rate of overall electricity consumption (according to the Australian Energy Market Commission Draft
Report: Power of Choice – giving consumers options in the way they use electricity, p14). According to
the Energy Networks Association Energy Price Fact Sheet, up to $11 billion in network infrastructure is
only being used for around four days per year (www.ena.asn.au). In jurisdictions such as South
Australia, up to 20 per cent of network capacity is used for the equivalent of 23 hours a year, according
to the Australian Energy Market Operator (Wind Contribution to Peak Demand, 2012). Even though wind
is making an important contribution to reducing the overall carbon intensity of the generation fleet, the
very high penetration of wind in South Australia is largely unable to contribute to meeting this peak
demand and its energy is low value.
Recurrent Energy emphasises the need to develop a renewable energy generation portfolio which
harnesses the advantages of solar PV delivering value in the peaks of demand and complements the
important role that wind plays.
Renewable Energy Target:
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As set out in the Issues Paper, the Renewable Energy Target (RET) has contributed to the growth in
large scale renewable energy in Australia. In Recurrent Energy’s view, the RET is the single most
important policy mechanism to facilitate the accelerated roll-out of renewable energy capacity in
Australia. The RET will provide a strong foundation for Australia’s transition to a clean energy
economy, and it will remain critical to supporting investment in renewable energy capacity in Australia
for the foreseeable future.
Advances in technology and deployment at scale continue to deliver reductions in renewable energy’s
costs of production in markets around the world such as USA, Canada, China, Europe and South Africa.
RET plays a major role in growing the industry and supporting the roll out of projects, thereby
educating companies and institutions and establishing the critical delivery supply chains in order to
capture cost reductions in the local market. It is only possible to achieve global best practice
benchmark costs through an established local industry with many players with knowledge and
experience who compete to deliver projects at an ever reducing cost. Through competitive forces in the
delivery supply chain, risk premiums are reduced, productivity is improved and work practices are
value engineered to deliver continuous improvements.
As active investors in the Australian renewable energy market, Recurrent Energy places a high value on
long term policy certainty and stability. We therefore support preservation of the key features of the
RET, including the 41,000 GWh target for 2020. We also support extension of the scheme beyond 2030
with a target for 2035 in order to maximize the term over which high up-front capital costs are amortised
and thereby minimizing the cost of energy. As set out above, Recurrent Energy also believes there
would be considerable benefit in modifying the RET to foster greater diversity and encourage the
development of renewable energy resources that meet growing peak demand.
Assistance programs:
The Issues Paper also notes an interest in additional means to encourage further development of
renewable and other alternative energy sources. While solar PV development has grown enormously
and this has resulted in staggering cost reductions in the cost of energy delivered, solar PV is not yet at
the point where it can compete against wind energy and conventional fuels. However with short term
incentives, this cost disadvantage can be overcome.
Recurrent Energy has extensive experience with incentive programs in the United States, Canada, India,
Spain, France, South Africa and several other international markets. Each of these markets has
programs which provide a boost to the economics of solar to overcome short term cost hurdles. These
include tax incentives for investors, fixed tariff offtake agreements and solar carve outs for certificate
based schemes. The impact of these schemes is to improve solar PV’s competitive position and leads
to establishing an industry of delivering and operating solar facilities. Significant inward investment,
local job creation and large capacity of successfully operating solar plants have been the result. The
prospect in some of these markets is for utility scale solar PV to be cost competitive without any
government assistance from around 2017.
Recurrent Energy strongly supports the work undertaken by the Australian Renewable Energy Agency
(ARENA) which is playing a critical role in supporting increased deployment of clean energy
technologies which are not yet fully competitive in the RET market.
Emerging renewable technologies benefit from ARENA support which greatly assists in overcoming
market access and cost barriers faced when competing with more established renewable and
conventional technologies. In the future, these technologies will travel down the cost reduction curve
experienced by more mature renewable technologies as the costs of development, financing,
interconnection, construction and operation reduce. However a short term boost for emerging
technologies is essential if cost competitiveness is to be achieved in the future.
ARENA would be enhanced if it had a dedicated support program for large scale solar. This would
provide the longer term certainty required for investment and avoid the pitfalls and inefficiencies of one
off programs.
Recurrent Energy strongly supports continued funding to ARENA to enable it to continue the important
work that it does in stimulating the market and providing a short term boost to enable solar to become
cost competitive.
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General Comments
Any further comments?
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