Renewable Energy 44 (2012) 119e127 Contents lists available at SciVerse ScienceDirect Renewable Energy journal homepage: www.elsevier.com/locate/renene Developing renewable energy supply in Queensland, Australia: A study of the barriers, targets, policies and actions Nigel J. Martin a,*, John L. Rice b a ANU College of Business & Economics, The Australian National University, Canberra, Australian Capital Territory 0200, Australia b Griffith Business School, Griffith University, Gold Coast, Queensland 4215, Australia article info abstract Article history: The Australian Government has set an ambitious target that at least 20 per cent of Australia’s electricity Received 30 November 2011 needs will be met by Renewable Energy (RE) sources by 2020. Given the limited use of RE sources for Accepted 9 January 2012 electricity generation, this national Renewable Energy Target (RET) leaves state, territory and municipal Available online 31 January 2012 governments in a challenging policy position. In this article, we examine the Australian state of Queensland where RE provides approximately 4 per cent of the region’s electricity supplies. The research Keywords: utilizes stakeholder theory to examine the developmental barriers, targets, policies and actions identified Actions by firms and stakeholder organizations in the RE industry sector. The results from our analysis show that Electricity Energy RE developments face a range of socio-technical barriers that require timely actions in the areas of fi Firms nancial incentives, infrastructure enhancement, regulation reform, community-centred developments, Renewable technology and workforce investments, and information and education programs. Also, in the context of Target RE planning, while the national RET is the preferred setting, the differences between Queensland’sRE installed generation capacity and electricity supply targets require clarification and agreement. Ó 2012 Elsevier Ltd. All rights reserved. 1. Introduction assets purchase and depreciation, and voluntary green power markets. However, the selection of RET enabling actions, In 2009, the Australian government legislated a Renewable commencement of the Australian carbon pricing legislation in mid Energy Target (RET) of 20 per cent by 2020 (i.e. approximately 2012, and the relatively short 10-year timeframe for meeting the 45,000 GWh of RE sourced electricity) in-line with its national plan national RET, presents some immediate challenges for domestic for a clean energy future [1,2]. While the plan is aimed at directly governments [2,6]. mitigating the impacts of climate change, the flow down of this In this investigation, the views of firms and stakeholder orga- target and the development of Renewable Energy (RE) supply at the nizations confronted with RE policies and governmental actions in state, territory and municipal levels of government presents the Australian state of Queensland are the primary subject of our a significant challenge [3,4]. Accordingly, the impositions of a poor analysis. In sum, we seek to answer three major research questions. RE development framework for RE asset construction and deploy- First, what are the barriers and impediments to increasing RE in ment may render the national RET unachievable in the remaining national regions and states? Some studies show that RE solutions timeframe. often face difficult technical, institutional and economic problems Important in the context of our study, the policy opportunities and impediments (e.g. poor financing arrangements, high technical that have been canvassed by various researchers and RE advocates risks, unhelpful regulation, faulty market systems) [7e9].In provide a series of policy prescriptions and actions that support the a pragmatic sense, understanding the various contextual impedi- achievement of the RET and any state-level targets [5]. These ments faced by firms and stakeholder organizations would be initiatives can take various forms, including RE Portfolio Standards instructive for researchers and industry practitioners. Second, (RPS), government tendering of RE projects, tax benefits for RE should state or regional governments establish targets for RE supply? For example, while some countries apply targets to specific RE sources (e.g. wind, solar, biomass) [11e14], Australia allows its states and regions to establish their own renewable energy plans, * Corresponding author. Room 3.20, Building 26c, ANU College of Business & policies and targets (e.g. the New South Wales (NSW) state Economics, The Australian National University, Canberra, Australian Capital Terri- tory 0200, Australia. Tel.: þ61 2 61259793; fax þ61 2 61254310. government has adopted the national RET as its target [4].In E-mail address: [email protected] (N.J. Martin). tracking its progress, a recent independent audit of NSW electricity 0960-1481/$ e see front matter Ó 2012 Elsevier Ltd. All rights reserved. doi:10.1016/j.renene.2012.01.006 120 N.J. Martin, J.L. Rice / Renewable Energy 44 (2012) 119e127 supply showed that 6.8 per cent of that state’s electricity supply is of global RETs shows a range of RE sourced electricity generation currently being met by RE sources, while electricity prices have targets from 20 to 35 per cent by 2020, stretching out to increas- risen by 6 per cent due to generators’ RET commitments) [15]. ingly more optimistic targets and outcomes of 50e80 per cent by However, other studies show that striving to meet an RET might 2050 [27]. We also noted that these types of aspirational RETs can result in the creation of multiple policy and regulatory instruments sometimes be set at less challenging (more easily achievable) levels [12] while also delivering less positive outcomes, including in smaller countries (e.g. 3 per cent) [28], while also requiring the increased unemployment and reduced energy security [14]. Given application of a strict definition to assure target efficacy (e.g. share this background, it is important to understand the benefits and of RE sourced electricity generation is based on actual supply or problems associated with setting state-level RETs. Finally, what production not installed capacity) [10,25]. However, despite some actions should states and regions take in order to meet national of the intricacies in setting RETs, we would argue that under- level RETs? Our extant RE literature argues successfully that various standing the types of state-level targets that might be established, government policies and actions can aid the growth of RE supplies and the utility of these targets for firms and stakeholder organi- in regions and countries [16,17]. However, in our case we are zations, will assist and inform the development of effective policies specifically examining the views and recommendations of firms and actions. and stakeholder organizations that have an exposure to the Government policies and actions represent the engine room for development of RE sourced electricity in the state of Queensland. RE supply development [16,17]. Some of our earlier studies in RE Hence, the summation of responses to these questions enables technology show us that appropriate policies can act as the glue understanding of the context, appropriateness of state-level RETs, that supports positive linkages and actions between institutions and policies and actions that support RE supply expansion. and actors in communities [21,29]. Indeed, some researchers depict The balance of our paper is developed as follows. In the next the relationship between policy and actions as simply: “if we section we will discuss and contrast some of the critical RE litera- establish a specific RE policy goal, then we need distinct programs and ture and theory related to our study, including a detailed expla- technologies to accomplish this” [21,29]. Several other studies point nation of the research setting. Next, the study will describe our to the requirement for effective policies that offer government structured research method, including the data collection and assistance packages (where required), investment and financial analysis procedures, followed by a presentation of the results and incentives arrangements, workable policies for RE FiT, cooperative their discussion. Our concluding statements highlight the impor- working systems for private and public organizations, industry tance of understanding what barriers and actions firms and development and equipment manufacturing assistance, and stim- stakeholder organizations consider to be important for the growth ulants and enablers of systems innovation and design of RE supply, while noting the research limitations. [5,8,22e24,30]. Importantly, these types of policy levers can serve as high level frameworks for actions and activities that support the 2. Building renewable energy supply e Barriers, targets, growth and advancement of RE assets, infrastructure, supply and policies and actions equipment manufacturing [7,13,23,24,26,31]. In this study, we are seeking to explore and expose the types of policies and actions, The literature explicating the barriers to RE growth provides an identified by firms and stakeholder organizations, which may array of socio-technical problems and hurdles that confront firms enable the state of Queensland to meet its obligation under the and industries [7e9,18]. In some instances, the problems can take national RET. a strong behavioural form, such as the lack of awareness or infor- mation to make sound judgments and decisions within the firm 3. Renewable energy supply in Queensland e An overview [18],