Renewable energy - frequently asked questions

Australia's Energy Consumption

Australians spend about $50 billion on energy each year, while energy exports earn more than $24 billion a year. The sector involves massive, long-lived capital items such as electricity plants, transmission lines, coal, oil and gas production facilities, pipelines, refineries, wind farms as well as a multitude of smaller facilities such as wholesale and retail distribution sites.

The production and use of energy comes with a major environmental challenge. Energy is the largest single contributor to global emissions of greenhouse gases. Transport emissions are a significant source of urban air pollution. Energy projects can affect Australia's air and water quality, biodiversity, noise levels and heritage, and must be sensitively managed. New technologies such as renewable energy meet these challenges.

Demands for energy in Australia is projected to increase by 50 per cent by 2020, and the energy industry has estimated that at least $37 billion in energy investments will be required by 2020 to meet the nation's energy needs. Meeting this increased demand for energy, while moving to a low-emissions future, is a key challenge facing Australia's future growth and living standards.

Developing Australia's abundant low-cost energy resources is a key to our future prosperity. Australia is the world's fourth largest producer, and largest exporter, of coal. We supply 8 per cent of the world trade for liquefied natural gas, and possess 40 per cent of the world's low-cost uranium reserves. 

Our known oil reserves are significant, but are projected to decline in the absence of new discoveries. Australia has significant wind and solar resources, and limited large hydro resources. Investment committed on energy projects under development in Australia totaled $11.1 billion at April 2004 and a further $38.8 billion in investment is under consideration (ABARE 2004).

Figure 1: Composition of Australian energy supply Total Energy ‘Other' Energy Wind and Solar Energy

(click for a larger image)

Renewable energy is an essential part of Australia's low emissions energy mix and is important to Australia’s energy security. It plays a strong role in reducing Australia’s greenhouse gas emissions and helping Australia stay on track to meet its Kyoto target and beyond. Australian Government support for renewable energy assists industry development, reduces barriers to the national electricity market, and provides community access to renewable energy.

What is Renewable Energy?

Renewable energy is sustainable energy that comes from the natural environment. Certain sources of energy are “renewable” as they are maintained or replaced by nature. Renewable energy is obtained from sources that are essentially inexhaustible, unlike fossil fuels, of which there is a finite supply and cannot be replenished. 

Renewable sources of energy include solar, wind, water, biomass, wood, waste, geothermal, wind, photovoltaic, and solar thermal energy. Non renewable energy sources include coal, oil and natural gas.

How does renewable energy work?

One example is solar power:

The heat from the sun can be used to heat water or air for residential, commercial and industrial use. Sunlight can also provide heating or be converted to electricity using photovoltaic (solar electric) panels. This electricity can be used to operate a multitude of electrical appliances. The sun's energy (light, heat, ultraviolet) can also be converted into heat using solar thermal (heating) panels.

Wind and flowing water can also be used to generate electricity. The energy from the wind can be harnessed by wind turbines and windmills to generate electricity and also to pump water.

Why is renewable energy important?

Energy is a basic input into virtually every aspect of personal and business activity. Energy, in some form, is involved in most household activities, such as heating, cooling, cooking, lighting, transport or enjoying services or products that require energy in their supply. 

Firms also use energy in virtually all of their activities, whether it is processing and manufacturing materials, transporting goods, heating and cooling premises, providing telecommunication services or powering computers. As a result, energy is a fundamental part of life in Australia and the energy sector is an essential component of the Australian Economy.

What are the benefits of using renewable energy?

One of the greatest benefits of renewable energy is its potential to provide affordable and clean sources of electricity. Additionally, there are reduced costs through resource savings, increased revenue through eco-efficiencies, and reduced risks and finance costs. Renewable energy also minimizes pollution and positively impacts the environment in many ways, thus companies who choose to use renewable energy enhance their reputational capital and hence are considered to be socially responsible corporate citizens.

Essential benefits that renewable energy has to offer:

• Renewables are sustainable energy resources which means that they avoid the depletion of natural resources for future generations
• Renewables avoid and reduce nitrogen oxide emissions, sulfur oxide emissions as well as carbon dioxide emissions
• Limits the adverse effect of high and fluctuating natural gas prices
• Reduces dependence on foreign oil sources and nuclear energy
• Renewables can avoid and reduce these air emissions as well as water consumption, thermal pollution, waste, noise and adverse land-use impacts
• Most conventional emission-abatement measures in all sectors impose costs with no offsetting savings; renewables, on the other hand, produce fuel savings over their operating lives that cover some or all of their initial costs
• Improves air quality and visibility due to decreased burning of fossil fuels which avoids compliance costs
• These environmental benefits can reduce the cost of complying with future environmental regulation and organizations can strategically benefit from a first-mover advantage or a “beyond-compliance” positioning in regards to competition
• Organizations using renewable energy can reduce risks which means avoiding a PR crisis and any costly “damage control” issues that come with it
• Renewable energy provides a new avenue for rural economic development, increases the tax base, insures against rising or variable fuel costs, decreases dependence on foreign energy sources
• Renewable energy generation projects create vibrant new industries in local communities, frequently in rural areas where the economy has not been thriving and therefore make contributions to society as a whole