Australians strongly support the use of solar energy as they know it saves them money, creates jobs and is clean. So you would think they would like to vote for a government that supports the solar industry’s continued growth. Solar system costs have fallen dramatically since 2000 when strong policies to support solar and help bring down costs were introduced at State and Federal government level. As a result, rooftop solar grew rapidly to over 2 million homes with either solar electricity, water heating or both.
Partly this has led to solar becoming cost effective without government handouts (Mitchell, 2015; Bloomberg, 2013). However, the main reason was the rapid scaling up of the solar industry as a result of German and Chinese government policies to develop the industry. But now the solar industry’s development is being actively blocked by conservative government policies in Australia (Grimes, 2015). This is at a crucial time when urgent action is being called for to address climate change that threatens our economy and natural assets such as the Great Barrier Reef. Solar is an essential ingredient to addressing this global problem. So what has happened to the solar industry over the past 3 years of LNP government in Queensland?
Whilst the LNP has been criticised for not keeping election promises, they did keep some from the last election; the removal support for renewable energy and energy efficiency measures implemented by the Bligh government (LNP, 2012). They did this almost immediately. These industry sectors were creating thousands of jobs in Queensland whilst saving home owners and businesses millions of dollars each year in energy costs as electricity prices spiralled upwards. The Australian Solar Council estimates that in the solar industry alone, jobs would have grown from around 5000 (2012) to 7500 full-time equivalent (FTE) positions by the end of 2014 (Grimes, J. 2015). This would have partially offset job losses in the coal industry, which fell by about 5000 jobs from 2012/13 to 2013/14, according to the Department of Energy and Water’s Coal 5 Year Summaries. Unfortunately, solar jobs have also fallen by about 1500 over the last couple of years. Now a recent report by Professor Carmignani (2015), from Griffith University Business School, shows that Queensland is not faring as well under the LNP as the last 6 years of the Bligh government, with unemployment increasing. A part of this is due to the jobs lost in the solar industry.
Queensland was becoming a leader in this field with renewable energies growing at about 12 percent per annum under the last 3 years of the Bligh Labor government. If this growth had been maintained, many more jobs would have been created and the Queensland electricity sector could have transitioned to almost 100 percent clean energy by 2030 (Berrill, 2012).
Instead of supporting solar, the Newman Government continued to attack the solar industry. They chose to slash electricity feed in tariffs for solar on homes, even suggesting that solar system owners could somehow negotiate a feed in rate with electricity retails. They also increased fixed charges for access to poles and wires. Now the LNP, via Energex regulations, are disallowing solar systems on commercial premises from exporting any excess energy to the electricity network. Technical reasons are given but the main reasons are political. All these measures discourage larger systems from being installed and increase the payback time for solar systems. Furthermore, the LNP have not supported any large scale solar and wind energy projects in the Sunshine State since they came to power, even though some very large projects have been proposed.
So why would the LNP wish to ‘’block” the development of the solar industry, both at State and Federal government levels? Firstly much of the State’s electricity generation capacity is State owned coal and gas power stations. Historically these returned millions of dollars to the State Treasury each year through electricity sales. This income stream has slowed dramatically, not just in Queensland, but right across Australia, with some coal fired power stations running at a loss. This occurred partly because rooftop solar on homes and businesses, combined with improvements in energy efficiency, have reduced the national demand for electricity from coal and gas power stations. Secondly, the finance industry is increasingly seeing coal power stations as a risky investment, given increasing calls for action to address an emerging climate crisis. China and the US have finally reached an agreement to act on this issue and this is likely to strongly influence other countries such as India, a buyer of Australian coal. So the Queensland Government is seeing the increased likelihood of our coal reserves, mining infrastructure and power stations becoming “stranded assets”. This has been highlight by former Liberal leader and economist, John Hewson (Caldecott, 2014). It means that the asset value could fall, right at a time when the State LNP government wishes to sell or give 99 year leases on some of these assets in order to pay for their election promises. Furthermore, a reduction in coal and gas sales would reduce royalty payments to Treasury, currently at about $2 billion per year or about 4 percent of the State’s annual budget. Finally, the State government has chosen mining as one of the four pillars of its economic strategy and has been spending between 1 and 2 billion dollars each year for investment in coal and gas infrastructure, effectively a form of subsidy costing Queensland households about $500 to $1000 per home each year. (Peel et al, 2014; Berrill, 2014). This means less money available to support other industry development.
What is required to address climate change is a carefully planned transition to a low carbon future, where renewable energy, combined with energy efficiency measures, will play the dominate role in energy supply, and much of the fossil fuels reserves will have to remain unburnt. This is recognized as necessary now by many respected institutions such as the International Energy Agency (IEA, 2014), the IMF (IMF 2013) and the IPCC (2013) if global warming is to be contained below a 2 degree Celsius rise. It is both technically and economically possible as research by Beyond Zero Emissions (2010), the University of UNSW (Elliston, 2011), Bloomberg (2013) and others has clearly shown. This transition was starting to happen in Queensland under the Bligh government’s Renewable Energy and Energy Efficiency plans, as my own research showed (Berrill, 2012). Note that it took many years for the Bligh government to develop and implement these policies before they were thrown out by the LNP. Unfortunately, the current Queensland Labor opposition’s energy policy is very weak and vague in this regard, with minimal promises being made. So it seems that even if Labor was returned to power on Saturday, they would be unlikely to strongly support the solar industry.
Industry groups such as the Australian Solar Council are calling on voters to support solar and other renewable energies at the coming election by carefully choosing who they vote for. The ASC is asking the next State government to get behind the solar revolution, not block it. This is most unlikely to happen if the LNP is returned and a minimalist approach is likely to be taken by Labor. As University of Queensland Researcher, Guy Pearse’s reports have shown, Coal is still King in Queensland (Pearse, 2010).
Trevor Berrill
Sustainable Energy Systems Consultant & Educator
www.solarissustainablehomes.com.au 29 Burnett St
Wellington Point
Queensland 4160
Phone 61 7 3207 5077 or Mobile 0400 177 283
References
Berrill, T. (2014). Acland Sustainable Energy Plan: An Alternative to the New Hope Acland Mine – Food, jobs and clean energy production on Acland land. Report prepared for the Oakey Coal Action Alliance. Available at www.solarissustainablehomes.com.au
Berrill, T. (2012). Clean Energy Pathways? – A Review of Energy Policy in Queensland with a Regional Case Study of the Impacts on the Felton Valley. A report for Friends of Felton. Available at: www.solarissustainablehomes.com.au
Beyond Zero Emissions (2010). Stationary Energy Plan. www.beyondzeroemissions.org
Bloomberg New Energy Finance (2013). Renewable energy now cheaper than new fossil fuels in Australia. http://about.bnef.com/press-releases/renewable-energy-now-cheaper-than-new-fossil-fuels-in-australia/
Bloomberg New Energy Finance (2013). Strong growth for renewables expected through to 2030. http://about.bnef.com/press-releases/strong-growth-for-renewables-expected-through-to-2030/
Caldecott, B. (2014). Stranded Down Under: Are fossil fuels bankrupting our nation both financially and ecologically? Lecture at Uni. Sydney. http://sydney.edu.au/sydney_ideas/lectures/2014/ben_caldecott.shtml
Carmignani, F. (2015). The true state of Queensland’s economy, without the spin. The Conversation 13 Jan, 2015. http://theconversation.com
Clean Energy Council (CEC) (2013). Clean Energy Australia 2013 Report.
Department of Energy and Water (2014). Coal 5 Year Summaries. Available at https://data.qld.gov.au/dataset/coal-industry-review-statistical-tables
Elliston, B. et al (2013). Least cost 100 percent renewable energy scenarios in the Australian National Electricity Market. Energy Policy. http://newsroom.unsw.edu.au/news/science/fully-renewable-electricity-could-be-competitive
Grimes, J. (2015). Personal Correspondence with J. Grimes, CEO of Australian Solar Council.
Hearps et al (2011). Renewable Energy Technology Cost Review. Melbourne Energy Institute Technical Paper, Uni. Of Melbourne.
IEA (2014). World Energy Outlook – Executive Summary. International Energy Agency report. www.iea.org
IEA (2011). Deploying Renewables – Best and Future Policy Practice. www.iea.org
IMF (2013). ENERGY SUBSIDY REFORM: LESSONS AND IMPLICATIONS. Report prepared by the International Monetary Fund.
IPCC (2013). Climate Change 2013 – The Physical Science Basis – Summary for Policymakers. Intergovernmental Panel on Climate Change.
LNP (2012). The CANDO LNP Resources and Energy Policy. www.candoqld.com.au
Mitchell, B. (2015). There’s a sunny future ahead for rooftop solar power: here’s why. The Conversation 26 Jan 2015 http://theconversation.com
Pearse, G. (2010). King Coal. Article in The Monthly, Issue May, 2010.
Peel, M. et al (2014). Mining the age of entitlement – State government assistance to the minerals and fossil fuel sector. The Australia Institute Technical Brief No.31. www.tai.org.au