Could the Gascoyne town of Carnarvon be a petri dish for the development of the state’s efforts to reach mandated renewable energy targets?
THE electricity market in Carnarvon is just a smaller version of a typical metropolitan market.
But, due to a few enthusiasts, it has already forged ahead of most places with its take-up of solar energy in the form of rooftop photovoltaic generation – to the point where it is testing the network’s ability to take more on – and is now looking to test the impact of a bigger-scale generation project.
What is happening in the isolated coastal town is providing valuable lessons and experience for bigger cities such as Perth, as Australia looks to shift to up to 17 per cent renewable energy by 2020 and faces the prospect of a carbon tax.
Carnarvon’s appearance as a solar hotspot is largely as a result of the efforts of colourful local businessman Lex Fullerton, a passionate leader in the state’s renewable energy business. He has nearly a decade’s experience as a green electricity generator and has invested about $1 million of his own capital into producing 46 kilowatt solar and 15kW wind power.
About one third of his power runs his ice works in the town. It uses the sun during the day to super chill the ice down to -18 degrees and then wind power to keep it almost as cold during the night.
The rest of Mr Fullerton power is exported to other users in the area, and the credits he earns under the federal government’s Renewable Energy Target scheme are sold to traditional electricity generators.
It seems plenty of others have followed the lead of his Solex power generation business, with a plethora of new photovoltaic generators producing power for themselves and exporting to the grid – from residential units up to 30kW units run by market gardeners of the area who have large cool rooms.
Mr Fullerton says Carnarvon is a good example of getting things right in the fickle business of renewable energy. Aided by what he describes as a supportive state-owned energy utility, Horizon Power, Carnarvon’s 650kW of solar power now represents about 2 per cent of the electricity generated in the town.
Although Carnarvon’s renewable energy generation will still lag that of the South West Interconnected System’s current 5 per cent, it is dominated by solar power, which is seen as a potentially more reliable form of baseload power than the cheaper but more intermittent wind prevalent in the SWIS, a major energy network centred on Perth.
For instance, when completed, the Collgar wind farm at Merredin will represent about 4 per cent of the SWIS system, taking the renewable power generation level to almost 9 per cent.
Mid West Energy is hoping to start filling that gap with a 200-megawatt solar thermal project at Perenjori.
Mid West Energy managing director Richard Harris believes the system can’t take much more wind and that solar projects like his will have to take a big proportion of the balance of the 2020 target in the SWIS.
“The issue the WA government has got is you can’t keep building wind farms because it is not necessarily the best form of energy for the system,” Mr Harris said.
He also notes that some of the feed-in tariffs for rooftop solar are extremely expensive, amounting to $400 per tonne of carbon abated in some cases.
Back in Carnarvon, Horizon Power is enthusiastic about the take-up of solar in the area from the point of view of community engagement, but is a little more cautious than locals such as Mr Fullerton regarding how easy it is to expand.
The popularity of rooftop solar in the town means the power generation is dispersed and very difficult to manage when it does drop out. A few big clouds, for instance, means power sources drop in and out of the system almost randomly. This is exacerbated by the size of the rooftop solar in the area. Horizon has allowed up to 30kW generators whereas the SWIS system is limited to 5kW.
Horizon has stopped allowing the bigger rooftop units at Carnarvon and thinks it will need to change the way the electricity network works to allow the renewable component to get as high as 20 per cent.
By comparison, the tiny market of Marble Bar is serviced by one central solar plant, which can provide up to 80 per cent of power at its peak and 40 per cent overall because it is centrally managed.
Mr Fullerton is a little more bullish. He thinks it’s a simple exercise to reach 2020 target under the current federal government scheme, especially as the use of diesel is so prevalent in the area despite its access to natural gas.
But he is worried about what the introduction of a new carbon tax, on top of what already exists.
“We already have a carbon tax,” Mr Fullerton said.
“It exists in Australia and has existed in Australia for the past 11 years.
Mr Fullerton estimates the RET scheme has slowly ratcheted up from a painless background level to one that now imposes an effective carbon price of nearly $6 per tonne.
At that level, he said, industry is starting to hurt as the cost escalated to push the 2020 target. Mr Fullerton thinks a rapid cost rise induced by a direct carbon tax would be dangerous, undoing much of the hard work that has been done to shift electricity generation.
He said it should be left alone, and the existing legislation refined over time.
“It is not broken, don’t fix it.”
That concern comes amid a national debate on energy, in which the federal government’s plans for a carbon tax have become mired in concerns about the cost of power, which has risen steeply in recent years as state governments have unwound domestic subsidies on electricity produced by traditional fuels and passed on the cost of existing renewable power.
While wind has been the early starter in the renewable power push, solar energy generation has grown of late with the introduction of incentives for residential households to export solar power.
Such schemes have been overwhelmingly successful, but also costly. The incentives were introduced just as cheaper solar systems became available, creating far greater levels of rooftop power generation than some governments had budgeted for. In NSW, the new government has suspended the state’s overly generous scheme.
With most of the incentives going to people who have the capital to pay for the solar systems, WA’s Economic Regulation Authority chairman Lyndon Rowe recently branded such schemes as middle-class welfare that contributed to inefficient outcomes.
This concern about the cost of popular policies appears well founded.
Evidence from renewable energy leader Germany shows that, not only has its push to lead in the adoption of renewable energy been expensive, it may also have been incredibly wasteful.
Germany has both a RET-style scheme, called EEG, and an emissions trading scheme. According to a recent report on the economic impacts from the promotion of renewable energy in Germany by respected economic think tank RWI, the local EEG has not triggered any drop in emissions beyond those already achieved by the country’s ETS.
In other words, one policy approach was enough.
RWI is scathing of the cost of the EEG policy. Far from creating a massive green jobs boom, its photovoltaic scheme has required subsidises worth as much as $US240,000 per worker and provided no net gain in employment. The think tank also claims the system of feed-in tariffs has stifled competition among renewable energy producers and even discouraged them from innovating.
Energy Minister Peter Collier said he has reservations about the cost of rooftop solar, especially when traditional electricity generation was still heavily subsidised, but it had engaged people and captured the community’s imagination.
“There are 40,000 homes with solar PV,” he said.
“Some suggest that is not the most efficient way to move to the renewable energy target.
“There might be money better spent in one dedicated renewable energy project (but) that (rooftop solar) empowers the community, it makes them part of the process.”
Mr Collier said whatever option was chosen, meeting the state’s renewable target for 2020 would be difficult and costly to taxpayers.
Up in Carnarvon, another private project is hoping to contribute to the knowledge required to overcome technical obstacles, with a solar farm that is large by the standards of the area.
Private group EMC Solar has started construction on a 300kW solar system in the town. EMC has appointed former state Labor planning minister Alannah MacTiernan, another passionate believer in the need for renewable energy, as business development manager.
To be financially viable, the $3.4 million project has received $1.7 million in capital rebates from the federal government, rather than receiving significantly inflated tariffs like a lot of rooftop solar.
Ms MacTiernan is adamant that with a mooted carbon price of $20 per tonne, renewable energy needs subsidies to develop the technologies required to wean the economy off fossil fuels.
Ms MacTiernan said one notable part of the project was data sharing between Horizon Power and the project to better understand the impact of solar power on the network and overcome some of the obstacles that new technology faces.
