The 'R' File -- Renewable Energy: Chasing Moonbeams, Passing Wind or Basking in the Sun?
Moran, Alan, Review - Institute of Public Affairs
ASKING THE QUESTIONS ON CLIMATE CONTROL
In relation to combating the supposed global warming trend, environmentalists are fond of saying, `If nuclear is the answer, we are asking the wrong question'. The answers favoured by the greenhouse warriors range from a draconian reduction of energy usage to adopting the Kyoto emission targets for `greenhouse gases', primarily carbon dioxide.
But implementing the Kyoto agreement can never be more than a very hesitant move to first base. Full implementation of the Kyoto Protocol would have only a trivial effect on the build-up of global CO2 levels. It would delay any possible effects, adverse or otherwise, by only four years. In other words it would put back some scientists' forecasts of a 2 deg C rise in global temperature from 2100 (under business-as-usual) to 2104.
The pain in achieving even the apparently modest Kyoto goal is now being seen across a great many nations. In Australia's case, it involves limiting greenhouse gas emission increases to 8 per cent above the 1990 levels by 2010. This is unattainable, given that our present output is 23 per cent above the 1990 level.
AUSTRALIA'S REGULATORY RESPONSE
Australia's approach to Kyoto involves fostering the four most common sources of renewable energy: wind; certain small-scale hydro schemes; biomass from waste; and solar thermal and photovoltaics. To promote the shift away from high-- carbon fuels, Australia has implemented a mandated renewable energy targets programme for electricity supply which involves the creation of renewable energy certificates from these eligible sources of generation. The certificates are readily tradeable and unused ones can be 'banked' for future usage.
There are two schemes currently in operation:
the Mandatory Renewable Energy Target (MRET); and
the voluntary `Green Power' sales.
The MRET scheme requires approximately 2 per cent of 'additional' electricity by 2010 to come from the approved green sources. This is set at 9,500 GWh (equivalent to about 4.2 per cent of the total electricity usage by 2010). Direct users and retailers are allocated shares of this and the penalty for non-compliance is $40 per MWh (4 cents per kWh); for many firms this is up to $57 per MWh in after-tax terms. Moreover, firms may pay a premium on the $40 per MWh (although at present they can meet their needs at a discount) since non-compliant companies are likely to face unwelcome publicity.
The Green Power scheme is based on the consumer opting to pay a premium (commonly $1 per week) for an additional percentage of green power to come from certified green sources, over and above those falling within the MRET obligations.
A recent audit' estimated that about 70 per cent of additional green energy used the MRET subsidy with 30 per cent being funded through Green Power. Most of the voluntary funding is by government agencies.
COSTS OF UNCONVENTIONAL LOW-CARBON ENERGY SOURCES
The exotic energy supplies are far more expensive than conventional ones. The general range of costs of generation in Australia are as follows:
Some specific cost estimates of renewables that have been brought together by the Sustainable Energy Development Authority of NSW are identified In Table 2.
Of the exotic forms of energy, only certain waste products, landfill and sewage gas, and some hydro schemes offer generation at costs that approach competitive levels. All of these are relatively limited in their availability and are likely to be quickly taken up. Solar hot water is the next cheapest, and would be highly competitive if users could rely on it totally and thereby avoid the costs of wires bringing energy to them.
The fact that solar relies on backup mains-supply brings into relief some additional costs to be factored into comparisons of different fuel-- sourced electricity. Even though all electrons are the same, some involve additional costs. …