Australia, long on coal and gas, keeps door open for renewables

By Madelyn Beck | 02/24/2016 07:48 AM EST

Australia is in a major energy transition with newly found confidence in its renewable market, but it still needs outside help to reach its energy goals.

Australia is in a major energy transition with newly found confidence in its renewable market, but it still needs outside help to reach its energy goals.

This means places like Europe, China and Silicon Valley, incubators for renewable technology, have big opportunities to expand Down Under.

"We can’t do it on our own," said Ivor Frischknecht, CEO of the Australian Renewable Energy Agency. "We’re not like the U.S., trying to do everything by ourselves."


Australia’s Clean Energy Council CEO Kane Thornton says the country’s greatest federal tool to foster renewable energy is the Renewable Energy Target (RET). The target has two main objectives. The first requires larger utilities to buy "certificates" for households that purchase small-scale renewable systems like solar panels. Under the program, that can translate into retail discounts and other financial incentives for installing small-scale solar, wind or hydro systems.

The second, bigger objective is to increase large-scale renewable energy generation to 33,000 gigawatt-hours by 2020, or enough energy to power more than 20 million homes.

Former Prime Minister Tony Abbott, known for his antagonism toward wind energy and other low-carbon alternatives to coal and gas, weakened the RET in June 2015, causing serious doubt among renewable energy advocates about the future of the program.

"Now, that all changes when we changed prime ministers," Thornton said, referring to the election of Prime Minister Malcolm Turnbull. "Really, from that point, this industry has taken more promise and more comfort for the future."

Australia has some of the world’s best wind energy potential along the continent’s southern coast and has the highest solar radiation per square meter of any continent, according to Geoscience Australia, the nation’s geoscience research agency.

Building and supporting the infrastructure to tap the potential has been the trick.

The Australian Renewable Energy Agency, which calls itself ARENA, was formed in 2012 to help boost Australia’s investment in renewable energy. Its CEO, Frischknecht, said increasingly it’s pursuing global companies selling solar panels, wind turbines and electric grid technology. "Of course, the parts themselves are going to be imported," he said, "but the construction is going to be local."

Australia faces the same challenge as the United States, Germany and China when it comes to increasing wind and solar power on an aging power grid. While Australia’s renewable use is about 13 percent, Frischknecht said some isolated areas are using closer to 30 or 40 percent.

Electric utilities must generate enough energy to meet demand, day or night. When the sun isn’t shining and the wind isn’t blowing, there has to be backup generation.

ARENA is partnering with AGL Energy, a large integrated electric utility in Australia, to invest in battery storage research and energy storage technology.

Calif. meets Australia

"Australia is an important and early market for us," said Sunverge Energy Inc. CEO Kenneth Munson, who this month announced that Sunverge had completed a $36.5 million round of financing for energy storage projects in Australia.

ARENA provided some funding, but the majority came from others, including $20 million from AGL, which dominates the renewable sector in every Australian state except Queensland, according to the Australian Energy Regulator.

A big part of what Sunverge does is integrate battery storage into microgrids, which Frischknecht said are needed on a continent where nearly two-thirds of the land is scattered with small communities still disconnected from major grids.

While the work to create the product was key, he said having a company based in Silicon Valley was a huge asset.

"Being in San Francisco, with all the tech talent you have here and human capital, human resources, the concentration of risk capital, all that helps," Frischknecht said.

Australia faces some of the harshest effects of climate change, yet it continues to rely heavily on emission-heavy coal for both energy and export profits as it remains the largest coal exporter in the world.

Frischknecht said the United States, China and Europe are the hot spots to get the renewable technology needed for an energy transition in Australia, which in turn will help employ Australians. He said the government-led program will help solar become just as cost-effective as Australia’s established wind farms.

Despite political headwinds, as there always are in Australia, Frischknecht said his agency plans to keep helping the renewable sector grow until the grid is "60, 70, 80 percent renewables. Then," he said optimistically, "our job will be done."