Australia’s renewable energy capacity is set to exceed a target the Federal Government said was impossible to reach by 2020, according to new research from Green Energy Markets.
In its quarterly Renewable Energy Index, GEM said the amount of renewable energy generated in 2020 was set to exceed the original 41,000 Gigawatt hour (GWh) Renewable Energy Target (RET) that was in place before being scrapped in 2015 by the federal government led by then prime minister Tony Abbott.
The original RET was put in place to help Australia meet its 2030 climate change commitment to cut emissions by 26 to 28 per cent from 2005 levels.
It was replaced by a less ambitious target of 33,000 GWh after the Abbott government characterised the original RET as impossible to achieve, while arguing there was already too much generating capacity.
The GEM study — funded by activist group GetUp — found estimated eligible generation would hit 41,381 GWh by 2020, not only exceeding the current RET, but the original RET as well.
“The Coalition’s argument that we can’t go any further than the target they’ve proposed without imposing some kind of huge economic shock and threat to reliability is obviously not true because we’re pretty much already there,” Green Energy Markets director Tristan Edis said.
“[Energy and Environment minister] Josh Frydenberg himself is saying that all the extra renewable energy that is about to enter the system will substantially push down power prices.”
Mr Edis said the Government’s National Energy Guarantee (NEG) would in effect deliver no meaningful emission reduction benefit, as projects already under construction and contracted exceed what is needed to achieve its established emission targets.
“According to economic modelling undertaken by Frontier Economics for the Energy Security Board, from 2017 onwards we’d need to install 9,271 megawatts [MW] of wind and solar in the NEM [National Electricity Market] to achieve the Government’s 2030 emission reduction target,” he said.
“Yet we already have 9,691 MW of projects that will be delivered in the NEM based on what has been committed to construction and what is being contracted under procurement processes currently underway.”
Those commitments include 650MW from the GFG consortium to power the Whyalla Steelworks in South Australia, a 500MW wind expansion from AGL, renewable energy auctions conducted by the Victorian and Queensland governments and a series of other contracts drawn up by generators such as Origin and AGL.
Mr Edis said the NEG in its current form would deliver a result that is almost 120 million tonnes of carbon dioxide short of Australia’s commitment to the 2030 Paris Agreement.
“The maths on the Government’s emission target is pretty basic,” Mr Edis said.
“According the latest emissions projections from the Government’s own Department of Environment, the Government needs to find 128 million tonnes of CO2 abatement in 2030 to achieve its economy-wide 2030 Paris emissions target.
“Even if Frontier Economics’ modelling was right, it means the NEG delivers just 10 million tonnes in 2030 compared to business as usual.
“Where the hell is the other 118 million going to come from?”
Mr Edis said none of the options the Government had to make up the shortfall seemed likely to work.
“If the Government was to adopt the most stringent vehicle emission standard they’ve contemplated in their consultation paper — which is a big if — then the Government’s own estimates are it would deliver 11.7 million in 2030.
“The Emission Reduction Fund is almost out of money.
“Agriculture? Somehow I can’t see a Government made up of the Nationals regulating to control emissions from cows and sheep or land-clearing.
“They could pay for abatement but where’s the money coming from?”
The Renewable Energy Index found renewables accounted for 19.7 per cent of the electricity generated on Australia’s main grids, or enough energy to power 8.7 million homes.
According to Green Energy Markets, rooftop solar installations in March were the highest monthly total ever, and over the first three months of the year are running at levels 50 per cent above those anticipated in economic modelling of the NEG.
“Households and businesses are continuing to install solar PV on rooftops at record rates in order to reduce their electricity bills. March installs set a new monthly record of 127 megawatts which will produce power equivalent to the consumption of 36,710 homes,” the report said.
“On top of the underestimates of large scale renewables, it suggests that the emission reduction target could be substantially strengthened at minimal economic cost.”