Australia battles for uniform FiT; Resources Minister has other plans

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The ongoing saga of Australia’s renewable energy policy continues as the country’s Resources Minister, Martin Ferguson, yet again shows his disapproval for the feed-in tariff. At the recent Solar Flagships conference event held in Brisbane, Australia, Ferguson made no effort to conceal his rejection of an incentive that has proven a success in Europe.

For months now, residents of the country have been petitioning for a uniform national FiT. At present each state has a different policy, and some areas have yet to receive a policy at all. The petition for this movement has now gained over 18,000 signatures.

One of the more popular policies in the country is the gross FiT, available in the ACT. This pays for all energy produced by a solar power system, regardless of whether it is fed or not. It is this type of incentive that Australia wants as a uniform policy, yet Ferguson rejects its success.

“Feed in Tariffs are not the solution some make them out to be…The Government should not be attempting to pick winners…A solar PV feed-in tariff does not guarantee Australian jobs. In fact it could simply result in greater imports of PV panels,” he claims.

Ferguson went on to attack the German policy, stating, “Germany’s solar subsidy saw German consumers in 2007 pay more than €1 billion in additional power bills to cover the cost of this policy – and yet – only around half of 1% of Germany’s gross electricity consumption come from solar PV that year.”
However, in defense of these claims, Germany is now in position to remain among the top three dominant players in the industry on a global scale, despite the country’s gloomy climate. Germany is generating billions a year through the PV industry and has now reached the dizzying heights of 50,000 employees in the industry. Australia however, which has some of the best solar conditions in the world, and is home to some of its best technological developments, has little more than 1,000 employees in the solar industry, and no manufacturing capacity to speak of.

It seems odd, then, that a figurehead of the country’s energy resources would reject a proven model for success.

Ferguson is clear on his standpoint when it comes to renewable energy. He is keen to implement solar; he just doesn’t seem sure on the how. The minister admits that, “Solar energy – like all the others – will only succeed if it is affordable, adequate and reliable in the energy market of the future.” Yet he does not see the feed-in tariff as a means to this end.
Instead, Australia’s Resources Minister backs the somewhat controversial Renewable Energy Certificates (RECs) scheme, which allows for money to be paid back on solar purchases. “The expanded Renewable Energy Target includes the Solar Credits initiative, providing multiplied credits for small generation units such as household solar PV installations. Taken together, these policy settings represent a valuable boost for the solar energy industry.” This option has been criticized for being confusing, applicable more to businesses than to homeowners and unpredictable in terms of return on investment.

The Australian government put in place the Renewable Energy Target (RET), which stipulates that by 2020, 20% of energy produced in the country should come from renewables, to stimulate the uptake of renewable energy sources in the country. The RECs work towards this target, with 1MWh of energy equal to one REC, so 45,000,000 RECs must be generated to meet the 2020 target. In order to meet the target, energy companies must surrender RECs into their holding account at the end of every calendar year at an amount representative to 20% of their market share. However, if energy companies don’t put sufficient RECs into the holding account, the company is fined at a rate much higher than the REC value. The target is therefore unattainably high, when the country’s present figures are taken into account. This is the main reason why the country calls for a uniform FiT: Renewable energy producers would have an incentive to produce electricity from solar sources, would not face any complex or potentially expensive problems along the way.

So then, it appears that the future of renewable energy in Australia is uncertain, as the people vs the powers-that-be battle continues. Ferguson concluded his speech by saying that, “Australia has an historic opportunity – we have both the will and the means to drive the take-up of clean energy.” “And the Government is committed to making the solar industry grow – both for the industry’s own sake, and for the energy security and prosperity of all Australians.” But that “we will not solely back solar at the expense of other renewable technologies.”

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