Australia’s renewable energy sector has undergone a massive transformation. The rise of storage technologies and falling costs results in a reduced need for renewables subsidies such as those going to solar PV and wind power projects, according to ARENA CFO Ian Kay.
In an interview ahead of the Australian Energy Storage Conference and Exhibition 2017, the Agency’s chief financial officer says the sector has moved from a niche market into a mainstream solution to national energy security.
“The sector has reached the stage where it has gone from being relatively niche and needing significant support, to being mainstream, where if you are looking to add additional generation in the system, the generation that’s provided by the renewable sector is actually cheaper than building new fossil fuel generation,” Mr Kay says.
Solar, wind and storage to dominate energy landscape
Mr Kay believes the price of solar PV and wind energy projects will continue to fall. At these costs, he says, solar and wind power will likely overcome fossil fuels as the dominant sources of generation in Australia.
But as renewables rise, so do grid stability issues. This is where storage technologies become increasingly vital to the future energy industry.
“The really big change is going to be the role of storage in its many forms, where storage is going to be required in an increasing capability to help balance the ability of generation.”
Residential batteries, utility scale batteries and pumped hydroelectric storage will be prominent across the energy landscape. Mr Kay also expects forms of hydrogen storage to play an increasing role in backing up the grid.
Sector needs to invest long-term to obviate renewables subsidies
Companies should ignore the noise surrounding the energy market in Australia, particularly at a political level. Kay says instead they should focus logically on transitioning to a low-carbon economy.
“They also need to think about contracting for services, be it energy or storage. That contract will lead to a lower cost finance, and that lower cost finance then leads to a lower cost of providing the service.”
With the energy industry in a period of disruption, adopters of renewable technologies are in a strong position to capitalise on growth opportunities.
“One of the big opportunities is in ARENA funding. Allowing people developing those opportunities to experiment with new technologies and transition their business, which then in turn can lead to future opportunities,” Mr Kay says.
Ian Kay’s full interview including his take on renewables subsidies can be read here.
He will appear at the Australian Energy Storage Conference and Exhibition 2017. The event runs from 14th-15th of June at the International Convention Centre in Sydney.
