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Australia’s Renewable Energy Industry

Overview

Renewable energy in Australia currently stands at 5.2% of total consumption, but accounts for only 1.9% of production. The discrepancy is due to significant non-renewable energy exports. The representation of Australian renewable energy sources is as follows:

Australia’s vast land area and hot climate, as well as its extensive coastline, means many areas currently uninhabited could be put to good use producing more alternative sources of energy. As Australia currently spends close to $50 billion on energy each year, more alternative and renewable energies would also bring significant economic benefits. Australia is also one of the few countries worldwide with abundant non-renewable energy resources and has  begun investigating potential sources of alternative energy.

Government Policies

The Australian government has set itself a target of increasing its use of renewable energy to 20% of total consumption by the year 2020. This target compares favourably with many other countries around the world – China aims to get to 15% by the same year, Japan 4% and the USA ‘double the amount.’ Whilst the European Union has a similar target in mind, some observers believe this to be an unrealistic aim. The Australian government has also not limited itself to a particular energy source in the same way as some governments (such as the UK) focussing on offshore wind energy.

In order to achieve its targets, the Federal government has targeted two distinctive areas – energy produced by power stations and energy produced in the home. Its Large scale Renewable Energy Target (LRET) has been designed with the specific aim of ensuring that Australia is able to produce 41,000GW in power stations from renewable sources. At the same time, the Small Scale Renewable Energy Scheme (SRES) is an uncapped fund encouraging people to install solar panels and radiant heat energy systems on the roofs of their homes. Several states also take part in feed-in tariffs which provides cash rewards for those who feed energy in to national systems.

Largest Projects

The two most abundant renewable energy resources available in Australia are year-long sunlight and wind. As a result, the vast majority of renewable energy projects are focused on these areas. Wind has been favoured for power station projects in the past while solar power is readily used on a smaller scale, such as in homes. Indeed, according to the Australian Bureau of Agricultural and Resource Economics, eight of the nine ‘major’ renewable energy projects at an advanced stage of development in 2009 were wind powered. The largest of these is the Roaring 40s’ 111 megawatt wind farm in South Australia which became fully operational in October 2011 costing an estimated $300 million to build. The Roaring 40s’ company, a joint venture between Hydro Tasmania and the CLP Group, is currently also involved in several projects across Australia. Comparable projects include the Union Fernosa Wind Australia’s Crookwell 2 project in the Southern Tablelands of New South Wales will have an electricity generation capacity of 92 megawatts

Australian Prime Minister Julia Gillard’s Federal government has also recently agreed to provide more than three quarters of a billion dollars to help build two of the largest solar power plants in the world, at Chinchilla in Queensland and Moree in New South Wales.

There are no other alternative energy projects of this size in Australia, although the geothermal energy sector has also seen heavy investment; there are currently 19 companies Australia-wide spending $A654 million in exploration programmes in 141different areas. Interest in this area is particularly high in South Australia which is widely to have Australia’s largest natural source of geothermal rocks.

Areas of concern

There are two major areas of concern for alternative energy use in Australia. Firstly, many have argued the environmental impact will be particularly harmful. Such issues are not just aesthetic, although many do complain about the effect alternative energy plants and equipment has on the landscape. Some researchers have reported wind farms are particularly harmful to birdlife. However, no one is quite sure what the impact in Australia will be. Many arguments are based on those used in Europe and the US where land space is significantly more limited.

The second major area of concern involves questions regarding whether alternative energy will be able to meet Australia’s energy needs. Some have suggested this will only be possible if Australia constructs nuclear power plants in conjunction with alternative energy ones. Only time will tell whether this will be the case.

Future plans

The focus in Australia for alternative energy will undoubtedly be based around 2020 government targets. As a result, wind and solar power will dominate; they are the two forms of alternative power most likely to guarantee a return on investment in such a short time frame. However, in the more distant future, geothermal energy may well become more important.

Visit our Alternative Energy section for more articles about renewable energy sources.

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