Jul 4, 2012

Why the federal government has failed at solar

The government will go to the 2013 election with not a single panel or heliostat installed from its $1.5 billion Solar Flagships program, first announced in 2009.

The newly appointed CEO of the Australian Renewable Energy Agency, the venture capital fund manager Ivor Frischknecht, will have plenty on his desk when he turns up for his first day at work in Melbourne next month. And the largest of a multitude of proposals will be the $1.2 billion Solar Dawn project in Queensland, closely followed by a handful of other rejected and unsuccessful Solar Flagships ideas.

The Solar Dawn consortium was putting on a brave face on Monday after it failed to get a power purchase agreement and the state government used the opportunity to pull its $75 million share of the funding. Effectively, though, as a flagships project it is already dead. The federal government has passed the dossier to ARENA, and the PR campaign being launched by Solar Dawn is about trying to ensure it sits at the head of the queue when Frischknecht and his colleagues assess how they will disburse the $3.2 billion at their disposal.

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45 thoughts on “Why the federal government has failed at solar

  1. Frank Campbell

    “(Japan) is tipped to emerge as the world’s third biggest solar PV market, courtesy of the generous feed-in tariffs (40 yen/kWh) announced by the government last month.”

    Exactly. Massive subsidies. Driven by a country traumatised by nuclear disaster, a country with close to zero fossil fuels…

    The same subsidies which are being rolled back rapidly in Australia and the rest of the world.

    Parkinson floats in an economic and technological fantasy world…

  2. Frank Campbell

    And note that AGL was one of the handful of companies advertising this week in favour of the carbon tax: AGL and most of the others (such as Vestas) are beneficiaries of renewables subsidies. Solar will go nowhere, as even Parkinson realises, but billions could yet be wasted on redundant, harmful wind turbines…

  3. GeeWizz

    Solar is only going to work if the Feed In Tarriff is significantly higher than cost of electricity.

    That either means increasing coal power prices or subsidising solar

  4. Hamis Hill

    There, surely, is no need to distinguish between Solar PV and Solar Thermal.
    Unless someone from Ffrank’s fantasy land is pushing Lunar PV then we can safely assume that the
    photons in the PV installations are in fact coming from the SUN!
    So please, just PV, or to help the upcoming generations who have to learn new things Photo Voltaics.
    This a mindless descent into unnecessary jargon.” Solar” PV, Why? Beyond cretinous!

  5. macadamia man

    “The world’s third biggest economy is tipped to emerge as the world’s third biggest solar PV market, courtesy of the generous feed-in tariffs (40 yen/kWh) announced by the government last month. ”

    This would be be a more useful sentence if it had been converted to Australian dollars. Thirty seconds with my desktop abacus gives just over A 48c / Kwh. That’s even better than the 44c / Kwh figure stripped from new home solar PV installers by the incoming coal-friendly Queensland administration just last week.

    Clearly the slow-burn climate disaster of favouring coal generated energy has produced less impact in Queensland than Fukushima has in Japan.

  6. John Bennetts

    Twisting his logic and avoiding the facts, as usual, Giles has again forecast a rosy future for small scale PV. This is despite his own examples indicating that the inbuilt carbon avoidance price for PV in the Japanese example he provided demonstrate conclusively that the Japanese are set to waste a monumental amount of money chasing a dream.

    Giles hates engineering talk, such as return on investment and comparison prices for various alternatives, so remind readers that the two most significant figures are:
    1. The LCOE, or Levellised Cost Of Electricity. This is the internationally accepted method of calculating comparisons for various energy options. PV is generally stone motherless last against its competitors, whether renewable or not.
    2. The abatement cost per tonne of CO2-e. Comparison of the $400 per tonne figure quoted above with the newly applicable carbon cost of $23 indicates that there is a very long road to travel before the gap can be bridged via PV.

    It’s long past time that the community demanded that all low carbon energy options be considered, because PV will not and cannot get us across the line affordably.

    It’s akin to using a pushbike to help power a train and then claiming that less deisel has been used. Hypothetical? Yes. Practical? Not on your Nelly.

  7. gapot

    The federal government should never get involved in trying to pick winners in any field. Every time they do they waste huge amounts of money which should be invested in infrastructure. They tried to save KODAK in Victoria only to find that film production was last century tech. I cant think of any federal funded project being worth while apart from their vote buying schemes.

  8. Jim McDonald

    As a matter of policy, solar energy has to be encouraged both domestically and in large scale commercial projects. The growing success of incentives for household PV systems has created problems in diminishing demand for energy from coal-fired generating bodies through reducing income and the increasing feed-in tariff commitments. Campbell Newman’s announcement to reducefeed-in payments by 82% for capacity produced by households can be seen as an outright cynical commercial exercise by the Queensland Government. But it is also an ideological stance undermining the renewable energy sector in Queensland by withdrawing any certainty that might have existed for investment in post-carbon solutions in the State .

  9. kd

    Oh Frank Frank Frank,

    Let me spell it out for you. Generous feed in tarifs create demand. Demand creates economy of scale. Economy of scale reduces prices. Reducing prices lessens the need for subsidy.

    The situation in Australia right now is that domestic PV is viable with SSRECs or whatever they’re called will pay itself back within 10 years (probably quicker). With a fair feed in tarrif (the full retail price seems fair to my mind) that’s going to be quicker still. Economies of scale causing reduced prices for hardware and installation are the major driver of small scale PV right now.

    It’s not like fossil fuel interests aren’t heavily subsidised (and I guess their externailities are being paid for more now then it was but only a bit), so give the subsidy bleating irellevance a rest.

  10. John Bennetts

    KD, KD, KD:

    Wrong, wrong, wrong.

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