Australia is likely to overshoot its ”20 per cent by 2020” renewable energy target by about 6 per cent, according to Origin Energy, potentially adding to rising electricity costs.
Origin, Australia’s largest electricity retailer, says the recent trend of falling overall electricity demand and increasing penetration of rooftop solar and solar hot water systems means Australia is likely to require only 250 terawatt hours (TWh) of electricity in 2020, rather than the fixed volume of 300 TWh anticipated in the renewable energy target legislation.
The target, to be reviewed this year by the Climate Change Authority, allows for an estimated 15 TWh of renewable energy supply from existing power stations (mainly wind and hydro) and requires an extra 41 TWh of renewable electricity from new large-scale developments by 2020. But according to Origin this will mean about 26 per cent of Australia’s energy will come from renewable sources by 2020, once the uncapped amount of power to come from small-scale systems is factored in (which Origin estimates at 8 TWh).
In a presentation yesterday, Origin called for a renewable energy target based on 20 per cent of ”actual” 2020 demand, or enough new large-scale renewable projects to generate 27 TWh of power.
Such a target would reduce costs passed on to consumers, the company said, including ”reduced requirements for expensive renewable generation, reduced network costs, and reduced requirements for peaking generation (required due to wind energy intermittency)”.
But Russell Marsh, policy director for the Clean Energy Council, said the renewable energy industry had planned around the existing 41 TWh target and switching to something more flexible would not deliver the certainty needed to drive investment. He said the level of electricity demand by 2020 was unknown: ”It could be more than 300 TWh, it could be less.” In New South Wales and Victoria the target accounted for about 5-6 per cent of the cost of a householder’s power bill and that proportion would fall in coming years as support for small-scale renewables was wound back, he said.
Greens leader Christine Milne said renewable energy technologies were bringing average electricity prices down because, ”although upfront costs are high, running costs are virtually zero. Far from reducing the renewable energy target, now is the time to set our sights towards a 100 per cent renewable energy future.”
