Human settlements

Renewable energy

Introduction

Renewable energy commercialisation in Australia

This publication showcases the projects funded under the Commonwealth Government's suite of renewable energy commercialisation programs, delivered through the Australian Greenhouse Office. The projects supported through these programs are commercialising innovative new technologies for the generation of energy from renewable sources across a wide range of applications. The projects in the publication are divided into eight technology categories: biomass, enabling technologies, hot dry rocks, hydro, solar photovoltaics, solar thermal, wave and wind.

SUPPORT FOR RENEWABLE ENERGY

Energy use is the dominant source of greenhouse gas emissions in Australia, with stationary energy alone contributing 49 per cent of the nation's total emissions. The Australian Greenhouse Office (AGO) is implementing a range of programs designed to reduce emissions from the energy sector while meeting the needs of the community for ecologically sustainable energy services.

Increasing the use of renewable energy provides a way of meeting Australia's increasing energy needs without adding to Australia's greenhouse gas emissions. However, many options for the increased use of renewable energy require further technological advances before the industry can become more widely cost-competitive.

The industry's good growth potential has been recognised by the Australian Government, which has allocated over A$300 million for renewable energy programs since 1997.

This focus recognises that development and expansion of the renewable energy industry, and building competitiveness, are key strategies for capturing significant greenhouse gas emission reductions from the energy sector over the longer term, although other abatement measures may in some cases be more costeffective in the short term.

Particular sectors of the renewable energy industry, notably biomass and bagasse, remote area power supplies (RAPS) and hybrid systems, offer significant potential for growth and will help build capacity within the industry and increase its competitiveness. There is also considerable potential to increase exports, particularly because many developing countries still do not have adequate energy supply industries or are dependent on diesel-based power.

Government initiatives aim both to encourage growth in and increase the proportion of Australia's renewable energy industry in the overall energy mix.

The Government is instituting a market measure, the mandatory renewable energy target, to provide the 'market pull' to new renewables investment, while a range of targeted programs and other initiatives will provide the 'market push' for renewable technology deployment and industry development.

THE MANDATORY 9,500GWH TARGET

The Mandatory Renewable Energy Target places a legal liability on wholesale purchasers of electricity to contribute towards the generation of an additional 9,500GWh of new renewable energy by 2010, continuing through to 2020. This increase in renewable energy generation is about equivalent to supplying the electricity needs of a city of 4,000,000 people. The measure applies nationally, with all electricity retailers and wholesale buyers on liable grids in all States and Territories contributing proportionately to the achievement of the measure. The measure is being implemented through Commonwealth legislation using a system of tradeable certificates. Australia currently has over 45,000MW of installed electricity generation capacity, with some 188,000GWh of electricity available. Most of this is thermal, fuelled by coal (84%) and gas (5%). Australia sources approximately 10.5% or some 16,000GWh of its electricity from renewable energy sources, most of which is generated by large hydro-electric plants. Various studies, including one conducted on behalf of the AGO, have predicted the degree of new investment required to meet the target will be in excess of A$2 billion over the period up to 2010.

RENEWABLE REMOTE POWER GENERATION

Renewable energy is often a viable means of reducing reliance on diesel-generated electricity in those areas of Australia not serviced by a main electricity grid. The Renewable Remote Power Generation Program (RRPGP) aims to increase the uptake of renewable energy technology in remote areas of Australia by providing rebates of up to 50% of the capital cost of renewable energy equipment to reduce diesel use in remote area power supplies. Up to $264 million will be available over the life of the RRPGP. Program funds are made available to participating States and Territories and are allocated on the basis of the relevant diesel fuel excise paid in each State or Territory by public generators. Annual savings of at least 50 million litres of diesel fuel are expected.

SUPPORTING PHOTOVOLTAIC SYSTEMS

The A$31 million Photovoltaic Rebate Program provides government assistance to householders and the owners of community buildings, such as schools, to install photovoltaic systems. Cash rebates are available for grid-connected or stand-alone photovoltaic systems. Funding available to the program should contribute towards the cost of around 5,000 systems over the life of the program. The rebates are calculated at the rate of A$5.00 per peak watt of output for new systems, up to A$7,500. A lesser amount of A$2.50 per peak watt of output is available to extend existing systems, up to a total of A$2,500.

RENEWABLE ENERGY EQUITY FUND

The Renewable Energy Equity Fund (REEF) is assisting to commercialise renewable energy technologies. Equity finance is available using Government funding of up to A$17.7m, which is being invested along with private sector funding to provide a total fund of $26 million. All initial investments are required to be in the early development stages (seed, start-up and early expansion). Generally, REEF operates in the same way as other venture capital investment funds. The fund manager raises money from investors and uses networks to identify small businesses in which to invest.

RENEWABLE ENERGY INTERNET SITE

The Government has launched an internet site www.renewable.greenhouse.gov.au dedicated to the Australian renewable energy industry. This site provides an on-line database covering many organisations in the Australian renewable energy industry, to assist customers to find suppliers and facilitate networking within the industry. The site also includes a searchable database of all Australian renewable energy installations over 5kW, descriptions of renewable energy technologies and how to use them, and information on government support for the industry.

COMMERCIALISING RENEWABLE ENERGY TECHNOLOGY

Accelerating the development and commercialisation of renewable energy technologies is a key element of the Government's overall renewable energy strategy. The Australian Greenhouse Office is providing support for commercialisation through the following programs:

Australia is endowed with many natural energy sources, particularly solar, wind, biomass and ocean waves. Many of the commercialisation efforts underway in Australia are addressing the challenges and opportunities posed by Australia's unique geography and mix of renewable energy sources. Examples include remote area power systems (RAPS), hybrid wind-diesel systems, sugar cane biomass projects and hot dry rock geothermal energy projects. The implementation of the Mandatory Renewable Energy Target (MRET) has spurred significant deployment of renewable energy systems. The support being provided to commercialise local renewable energy technologies will allow Australian companies to maximise the opportunities available under the MRET.

Renewable Energy Showcase

The Renewable Energy Showcase, launched in 1998, is a one-off competitive grants program designed to develop and showcase Australia's renewable energy industry and thus reduce greenhouse gas emissions. Leading edge 'showcase' projects were selected via a competitive tender process. The projects offered funding were selected on the basis of the following criteria. Projects should:

Renewable Energy Commercialisation Program

The Renewable Energy Commercialisation Program (RECP) was launched in 1999 following the Renewable Energy Showcase Program. RECP is a five-year competitive grants program that provides support for strategically important renewable energy technology initiatives that have strong commercial potential. The projects offered funding were selected on the basis of the following criteria:

The response of industry to the program has been overwhelming with more than 200 applications received over the six funding rounds. Some 50 projects have been offered grants for many different forms of renewable energy, including photovoltaics, enabling technologies, wind, wave and biomass energy.

Individual grants are usually between $100,000 and $1 million and grantees fund at least 50% of the project costs from their own sources. Many of the projects being supported offer benefits other than greenhouse gas abatement, such as regional development, salinity amelioration, waste reduction and export potential.

The program also incorporates a A$6 million industry development component to assist the development of a sustainable internationally competitive renewable energy industry in Australia. Current projects offered funding include assessment of renewable energy resources, development of standards for equipment, and training and accreditation of designers and installers of renewable energy systems.

Renewable Energy Industry Program

The Renewable Energy Industry Program (REIP) aims to encourage the development of an internationally competitive renewable energy industry and to reduce greenhouse gas emissions. Initially a grants program of the Department of Industry, Science and Resources, this program has now been integrated with the Renewable Energy Commercialisation Program.

For further information about the Australian Greenhouse Office, visit the website at www.greenhouse.gov.au

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