CLEAN ENERGY AUSTRALIA REPORT 2015 AUSTRALIA CLEAN ENERGY CLEAN ENERGY AUSTRALIA REPORT 2015 Front cover image: Nyngan Solar Farm, New South Wales. Image courtesy AGL. This page: Taralga Wind Farm, New South Wales TABLE OF CONTENTS 02 Introduction 04 Executive summary 05 About us 06 2015 Snapshot 08 Industry outlook 2016–2020 10 State initiatives 14 Employment 16 Investment 18 Electricity prices 20 Demand for electricity 22 Energy storage 24 Summary of clean energy generation 28 Bioenergy 30 Geothermal 32 Hydro 34 Marine 36 Solar: household and commercial systems up to 100 kW 42 Solar: medium-scale systems between 100 kW and 1 MW 44 Solar: large-scale systems larger than 1 MW 48 Solar water heating 50 Wind power 56 Appendices INTRODUCTION While 2015 was a challenging year for the renewable energy sector, continued reductions in the cost of renewable energy and battery storage, combined with some policy Kane Thornton Chief Executive, stability, meant the year ended with Clean Energy Council much optimism. Image: Boco Rock Wind Farm, New South Wales As the costs of renewable energy The national Renewable Energy competitive market, and a broader and battery storage continue to Target is now locked in until 2020 and range of increasingly attractive options plunge, the long-term outlook for our confidence is gradually returning to the to help consumers save money on their industry remains extremely positive. sector. But with only four years until power bills. The International Renewable Energy most large-scale projects need to be The buzz around storage and smart Agency released analysis at the delivered under the scheme, there is no technology is building to a crescendo. beginning of this year that found time for navel-gazing. As these options become more a mix of renewable energy and energy Prime Minister Malcolm Turnbull and his affordable, they will completely change efficiency would be enough to meet government are focused on leading the the way we use and think about energy. the global commitments made nation into a new era of technological in Paris – while growing the economy With so much change underway, innovation. This aligns perfectly with and creating millions of jobs. there is lots of work for the Clean the rise of renewable energy, which has Energy Council to do on behalf of the We now have an international climate disrupted the traditional ways of doing industry, from safety and integrity agreement. Exactly how Australia will business in the last decade across the to regulation, policy development, meet its longer-term commitments energy industry. analysis and advocacy. Many remains unclear but, no matter which The energy industry has been used to challenges remain, but the future policy mechanisms are chosen, it’s working with decades-long investment for renewable energy and battery clear that renewable energy will play an horizons, where change happens storage has never looked brighter. important role in delivering them. at a glacial rate. But like the taxi and telecommunications industries, the energy sector has found itself blindsided by rapid change, and is now scrambling to get back ahead of the curve. The result will be a more 3 EXECUTIVE SUMMARY ESTIMATED CONTRIBUTION OF EACH TECHNOLOGY TO ANNUAL ELECTRICITY RENEWABLE GENERATION GENERATION IN 2015 Hydro 40.1% Renewables 14.6% Wind 33.7% Fossil fuels 85.4% Household and commercial solar < 100 kW 16.2% Bioenergy 9.1% Large-scale solar PV 0.6% Medium-scale solar 0.2% Solar thermal 0.08% In mid-2015, the Large-scale While investment confidence is renewable energy generation counts Renewable Energy Target (LRET) was gradually returning to the sector, state towards the large-scale target of reduced from 41,000 gigawatt-hours and territory governments have 33,000 GWh. This means the (GWh) to 33,000 GWh by 2020. provided additional incentives to industry is just under halfway encourage renewable energy projects towards meeting the LRET. The positive for the industry was that in the short term. The Australian the amended legislation ended almost More than 8000 megawatts (MW) Capital Territory Government led the two years of uncertainty and frozen of wind power and 2500 MW of solar way with a series of reverse auctions for investment. The amendment also power projects are either under wind and solar projects which have removed the provision for a review of construction or have planning approval. been effective at securing renewable the scheme every two years, locking in This is more than enough to meet the energy at the lowest possible price. certainty for the rest of the decade. RET, and 1000 MW of projects were While 2015 was a tough year, it ended Generation from hydro during 2015 added to the pipeline in 2015 through with much optimism. was down on the year before due to government approvals processes. low rainfall, but the contribution of According to analysis by the Clean Tasmania produced the most wind and solar increased by 20 per cent Energy Council and ROAM Consulting renewable energy overall, followed by each – more than enough to take up (now part of EY) , the revised target is Victoria and South Australia. the slack. Consequently renewable expected to create more than $10 energy’s overall share of the national Employment in the renewable energy billion worth of investment and more electricity mix was up during the year, industry contracted by 3 per cent in the than 6500 new jobs in large-scale making up 14.6 per cent of the 2014-15 financial year, a decline of 470 renewable energy alone. Including the national total. jobs compared to the financial year economic benefits from the small-scale before. According to the Australian scheme, the total benefit expected is More than 35,000 GWh of renewable Bureau of Statistics, the industry $40.4 billion worth of investment and energy was generated in 2015, of employed 14,020 people at the end of 15,200 jobs. which 15,200 GWh of large-scale the year. 4 ABOUT US The Clean Energy Council is the peak body 2O% for the clean energy INCREASE industry in Australia. We represent and IN WIND work with hundreds AND SOLAR of leading businesses GENERATION operating in solar, wind, energy efficiency, hydro, bioenergy, energy storage, geothermal and marine, along with more than 4000 solar Image: Uterne Solar Power Station, Northern Territory installers. Investment in large-scale projects milestones at its CETO 5 Perth project. continued to languish due to the BioPower Systems launched its We are committed to accelerating lingering investment uncertainty across bioWAVE generator off the coast of the transformation of Australia’s the industry. Investment in major Port Fairy in Victoria in December. energy system to one that is projects was $1.2 billion, but almost Geothermal energy had a challenging smarter and cleaner. all of these had additional support year. While the technology has shown from state or federal government The Clean Energy Council leads promise, it is expensive and complex to programs. Small-scale renewables and supports the growth of the access the resource, and this challenge fared better, with $2.2 billion invested clean energy industry in Australia has so far proved difficult to overcome. in technologies such as rooftop through: solar power. Energy storage is widely expected to > shaping policy create sweeping changes to the way The three largest solar power plants in > developing standards and energy is generated and used. While the country were fully operational by regulations and ensuring the the cost of units is not yet at a level early 2016 – the Nyngan (102 MW) integrity of the industry where battery storage is a mainstream and Broken Hill (53 MW) power plants > promoting the industry consumer technology, a variety of pilot developed by AGL and First Solar, and > providing a range of valuable projects are being conducted across the Moree Solar Farm (56 MW) services to our members, the country to demonstrate how developed by FRV. customers and partners. storage can best be integrated into Marine energy is still at an early stage the power system. of development, but innovative Australian technologies showed promise during 2015. Carnegie Wave Energy met all the necessary funding 4 5 2015 SNAPSHOT Renewable energy provided 14.6 per The contribution of both wind and Five new wind farms were completed, cent of Australia’s electricity in 2015, solar power grew by just over 20 per along with eight solar farms larger than enough to provide power for the cent in 2015, while the demand for 1 megawatt of capacity. equivalent of approximately 6.7 million power across the country increased Sales of rooftop solar and solar hot average homes. slightly, the first rise following six water were largely unaffected by the years of decline. Low seasonal rainfall in key catchments RET review, and solar power passed serving hydro power plants in Tasmania Investment confidence in the 5 gigawatts of capacity early in meant substantially lower generation Australian renewable energy sector 2016. The output of these systems is from these power plants than the languished last year, during and equivalent to a virtual power station previous year, with overall hydro beyond the end of the RET review. large enough to power all the homes generation falling by 3.5 per cent and The review was finally resolved by in Brisbane and Perth1. water storages also very low. a bipartisan legislative change in State feed-in tariff rates have June, and interest from domestic Wind and solar power provided a continued to reduce, leading to lower and international investors has been sign of things to come, increasing but more stable and sustainable sales growing throughout 2016. enough to more than compensate figures.