Recently we published an article on concerns Australia’s Renewable Energy Target may not be met. Origin Energy is reportedly saying quite the opposite.
Results of a joint study by Standard & Poor’s Ratings and clean energy/carbon analytics firm RepuTex found just 14 to 17 percent of electricity would be sourced from renewables by 2020, depending on carbon pricing – well short of Australia’s 20%.
However, various news items appearing today state Origin Energy believes falling electricity demand and uptake of rooftop solar power and solar hot-water systems by Australian households seeking to rein in energy costs means Australia may overshoot the target. Origin apparently believes if those generation sources are factored in, 26 per cent of Australia’s energy will come from renewable sources by 2020.
If that is the case, it would seem a point for rejoicing – but perhaps as part of what some might see as an undeclared war on solar PV by utilities around the world, Origin seems to be indicating this could be a Very Bad Thing as it would cause upward pressure on electricity prices.
As such, according to an article in the Sydney Morning Herald, Origin has called for a target based on 20 per cent of ”actual” 2020 demand or enough new large-scale renewables projects to generate 27TWh of electricity.
Clean Energy Council Policy Director Russell Marsh has said the Renewable Energy Target accounts for just a few percent of electricity bills and, citing New South Wales and Victoria as examples, would reduce further in coming years as support for small-scale renewables was reduced. Mr. Marsh also points out actual electricity demand in 2020 cannot be predicted.
Furthermore, contrary to Origin Energy’s electricity price rise bogeyman, what is known as solar’s Merit Order Effect appears to be decreasing the cost of wholesale electricity prices.
Additionally, national solar solutions provider Energy Matters‘ Nick Brass points out:
“If Australia overshoots the Renewable Energy Target then there will be an oversupply of renewable energy certificates in the market and their value will further plummet; which in effect should make the cost of electricity from utilities even cheaper for the consumer.”
However, Mr. Brass points out what should occur, likely won’t.
“What happens is some energy retailers pass through the cost of the certificates they carry on their books at the full $40 value based on the clearing house price guarantee legislation. This cost is then passed onto the consumer. If the reports we’re seeing are accurate, Origin Energy appears to be contradicting itself.”
While Origin has substantial renewable energy generation assets, fossil fuel based electricity generation still rules its roost. Giles Parkinson’s article: “Why Generators Are Terrified Of Solar” might best sum up the reason behind the disquiet utilities are increasingly experiencing with the rise of solar:
“..solar PV is not just licking the cream off the profits of the fossil fuel generators – as happens in Australia with a more modest rollout of PV – it is in fact eating their entire cake.”
