A new study states electricity generation from renewable sources may fall well short of the Australian government’s mandatory target of 20% by 2020.
Results of a joint study by Standard & Poor’s Ratings and clean energy/carbon analytics firm RepuTex are based on three gas and carbon price scenarios designed to show the impact on Australia’s National Electricity Market (NEM) – and which sources are most likely to benefit from a shift away from coal.
The modelling suggests renewables-based generation could range from just 14% to 17%, depending on market pricing.
According to RepuTex Executive Director Hugh Grossman, weak wholesale prices and a glut of renewable energy certificates (RECs) have dulled investments in renewables. Mr. Grossman says in order to reach the target, there will be renewed interest in wind farms, but installed wind power capacity would have to jump by between 4,750MW to 5,000MW to reach the 2020 target.
Mr Grossman states meeting carbon emission targets is dependent on renewables uptake; particularly “the potential improvement of renewable technology as a means to generate base load power. Should this occur, we may see renewable generation leapfrog gas altogether.”
Baseload solar power is no longer the stuff of pipe dreams. In June last year, the Gemasolar project in Spain became first fully-operational commercial-scale solar farm in the world able to provide baseload electricity generation. Non-profit think-tank Beyond Zero Emissions (BZE) is lobbying for baseload solar technology to be used to help replace South Australia’s emissions intensive Northern and Playford B brown coal-fired power stations.
As to the future of gas in Australia as an alternative to coal-fired powered generation, the report finds this will be largely determined by the outcomes for both the gas price and the carbon price beyond 2015.
“While gas seems to be the logical replacement, the winner under carbon pricing may not be so clear cut. We anticipate gas generation will increase from 11% of our total fuel mix, however the extent of that win could be muted by the growth of export markets from 2014 and the expected increase in gas price levels,” says Mr. Grossman.
Standard & Poor’s/RepuTex: “Will Gas or Renewables Usurp Coal?” report can be downloaded here.
