Part 2 Our future options Victoria has extensive energy resources. As we move away from high emissions forms of energy, we have to decide how to best use these resources and what mix of options will best meet our energy needs. Exploring these options poses difficult questions and requires us to make tough choices. Shifting to renewable energy, developing low emissions coal 2 technologies and reducing our use of high emissions forms of transport will bring opportunities for new industries and jobs. But we also need to deal with the challenges that accompany change. Changing our behaviour and adopting new ways of doing things to save energy will be essential to supporting these changes to energy supply. 23 Part 2 Our future options 2.1 Renewable energy There is great potential for renewable energy to contribute to Victoria’s future economic prosperity. But we have to overcome some significant challenges before renewable energy can play a major part in meeting our energy needs. Renewable forms of energy are set to play a greatly However, we face a number of challenges in producing expanded role in meeting Victoria’s future energy needs. and using more renewable energy. To reduce emissions from transport and electricity, Many new forms of renewable energy are much more renewable energy must be a substantial part of our new expensive than fossil fuels, even taking into account energy mix. Victoria will not be alone in making this a price for carbon. transition; the shift to renewable energy is a global trend, In addition, power from sources such as wind and solar with the use of renewable energy for electricity growing is variable. Because we need to have a continuous supply rapidly worldwide. of electricity, we need to deal with reliability through the Victoria has an abundance of renewable energy sources. complementary use of coal and gas-fired power, and in the long term by finding ways of storing this energy. The national target of increasing energy from renewable sources to at least 20 per cent by 2020 will see a massive Some renewable energy sources, like geothermal, do growth in renewable energy over the next ten years (see offer the promise of providing baseload power. But the Box 4 – p25). A carbon price (put in place by an emissions geothermal resource and the technology itself need further trading scheme) would also make energy from fossil testing and development. fuels more expensive, making renewable energy more This means that until renewable energy costs reduce, competitive. carbon prices increase, and renewable baseload power and The growth in this sector will create new industries across large scale storage options become available, renewable the state that will stimulate local economies and generate energy will work alongside – and not replace – fossil fuels thousands of skilled jobs – making a substantial as our major source of energy. contribution to Victoria’s future economic prosperity. 24 Box 4. How renewable energy production Renewable energy resources in Victoria could change in Victoria Renewable energy is generated using resources that can be rapidly replaced by ongoing natural processes. This means Wind is likely to see the most growth over the next ten harnessing resources such as the sun’s radiation or heat, years. After this time, solar and new technologies such as the wind, the tides or heat stored underground to make geothermal may progressively play a larger role. Biomass electricity and heat. and hydro are low cost forms of renewable energy but their overall growth is likely to be limited. Hydro is limited In almost every case, carbon is not burnt in order to release by the need for dams and biomass is likely to be most energy (bioenergy is the exception). Therefore, generating suitable for local or niche applications. renewable energy emits little or no greenhouse gas. The main sources of renewable energy that could be harnessed to create electricity in Victoria are shown in Figure 8. Wind, bioenergy and hydroelectricity currently account for over 99 per cent of renewable energy generation in Victoria, compared with around 0.5 per cent for solar power. It is likely that the supply of renewable energy will further diversify over time as new renewable technologies emerge to suit different user needs. All potential renewable energy resources pose potential challenges for Victoria. Overcoming these challenges and ensuring renewable energy is able to be part of our future energy mix will require a comprehensive, systematic approach. All levels of government will need to work 2.1 with industry and the community to ensure that measures are put in place to deliver an effective, long term plan for the deployment of renewable technologies. 25 Part 2 Our future options Wind Generating electricity from wind uses established technology and provides intermittent generation. Generally, electricity grids are able to accept up to 20 per cent of energy supply from variable power sources before extra provisions are needed to maintain the security of the system. At February 2010, Victoria had a cumulative capacity of 428 megawatts (MW), generating about 1,125 gigwatt hours (GWh) of electricity per year (almost 2 per cent of all electricity generation). A further 1,554 MW of projects have been approved. Offshore wind power will be much more expensive than onshore, so it is unlikely to be developed for some time. Wind resources in Victoria Potential for growth Advantages Challenges to be overcome UÊ /iV }ÞÊÃÊ«ÀÛi UÊ Ê7`ÊÃÊ>ÊÛ>À>LiÊÀiÃÕÀViÊÃÊiiVÌÀVÌÞÊÃÊÞÊ}iiÀ>Ìi`Ê UÊ "iÊvÊÌ iÊV i>«iÃÌÊvÀÃÊvÊÀiiÜ>LiÊiiÀ}Þ when the wind blows. This makes it difficult to manage UÊ LÕ`>ÌÊ«ÌiÌ>ÊÜ`ÊÀiÃÕÀViÃÊÊ6VÌÀ> the reliability of electricity UÊ Ê iÃÊÌÊÀiµÕÀiÊ>ÊÜ>ÌiÀÊÃÕ««Þ]ÊV«>Ài`ÊÌÊÃiÊÌ iÀÊ UÊ Ê7`ÊiiÀ}ÞÊÃÊ>Ê`ëiÀÃi`ÊÀiÃÕÀViÊ>`ÊÃiÊÀiÃÕÀViÃÊ renewable sources are located away from the existing electricity grid UÊ Ê Ã«iÀÃi`ÊV>ÌÃÊvÊÜ`Ê}iiÀ>ÌÀÃÊÀi`ÕViÃÊÌ iÊÀÃÊvÊ UÊ Ê7`ÊÌÕÀLiÃÊ>`ÊiÜÊÌÀ>ÃÃÃÊiÃÊ>ÞÊ >ÛiÊ no supply visual amenity impacts on the landscape, which may cause community concern in some locations. UÊ Ê iÜÊ«Ài`VÌÊÌiV }ÞÊV>Ê>ÜÊÌ iÊÕÌ«ÕÌÊvÀÊÜ`Ê power to be better managed by the network operator. Solar Energy from the sun can be used to generate electricity directly (solar-electric or photovoltaic) or heat (solar-thermal) which can be used to generate electricity. Large scale solar plants are expected to supply in excess of 300 GWh of electricity in Victoria by 2015 as a result of Victorian Government support for large scale solar generators. Small scale photovoltaics could produce around 30 to 50 GWh by 2020. Solar resources in Victoria Potential for growth Advantages Challenges to be overcome UÊ Ê-}wV>ÌÊiViÃÊvÊÃV>iÊ>iÊ>À}iÊÃV>iÊÃ>ÀÊÕV Ê UÊ Ê ÕÀÀiÌÞÊiÊvÊÌ iÊÃÌÊiÝ«iÃÛiÊvÀÃÊvÊÀiiÜ>LiÊ less costly than small scale (rooftop) solar energy (significantly more expensive than wind) UÊ ÀÌ iÀÊ6VÌÀ>Ê >ÃÊiÝViiÌÊÃ>ÀÊÀiÃÕÀVià UÊ Ê->ÀÊ«À`ÕViÃÊiiÀ}ÞÊ>ÌÊ>ÊÛ>À>LiÊÀ>ÌiÊ­«ÜiÀÊÃÊÞÊ UÊ Ê->ÀÊiiÀ}ÞÊÃÊiÃÃÊÌiÀÌÌiÌÊÌ >ÊÜ`Ê>`Ê } iÀÊ generated when the sun shines) generation occurs between 12:00 pm and 4:30 pm which UÊ Ê/ iÊLiÃÌÊÃ>ÀÊÀiÃÕÀViÃÊ>ÀiÊv>ÀÊvÀÊ««Õ>ÌÊViÌÀiÃÊ>`Ê coincides with part of the peak demand period in summer at the margins of existing transmission infrastructure UÊ Ê->ÊÃV>iÊÃ>ÀÊV>Ê«ÀÛiÊ`ÛiÀÃÌÞÊÊiiÀ}ÞÊÃÕ««ÞÊ>`Ê UÊ Ê->ÊÃV>iÊÃ>ÀÊÃÊÃÕLÃÌ>Ì>ÞÊÀiÊiÝ«iÃÛiÊÌ >Ê>À}iÊ in the long term may reduce peak demand. scale solar. Potential for growth over the next 20 years. Substantial potential – could be used in more than 15% of our electricity supply Significant potential – could be used in between 2% and 15% of our electricity supply 26 Limited potential to expand – unlikely to be used in more than 2 % of our electricity supply iÌ iÀ> iÌ iÀ>Ê i>ÌÊvÀÊÌ iÊi>ÀÌ ½ÃÊÌiÀÀÊV>ÊLiÊÕÃi`ÊvÀÊÃ>Ê>`Ê>À}iÊÃV>iÊ>««V>ÌðÊ>À}iÊÃV>iÊ>««V>ÌÃÊV>Ê ÕÃiÊ i>ÌÊvÀÊÀVÃÊÀÊÕÃiÊ ÌÊÜ>ÌiÀÊ>`ÊÃÌi>Ê}iiÀ>Ìi`ÊÊÌ iÊ}ÀÕ`°Ê Ì ÊiiÀ}ÞÊÃÕÀViÃÊV>ÊLiÊÕÃi`ÊvÀÊ`ÀiVÌÊ i>ÌÊ >`Ê«ÜiÀÊ}iiÀ>Ì° Geothermal resources in Victoria Potential for growth ?? Advantages Challenges to be overcome UÊ ÊiÌ iÀ>Ê >ÃÊÌ iÊ«ÌiÌ>ÊÌÊ«ÀÛ`iÊ>ÊÃ}wV>ÌÊ«ÀÌÊvÊ UÊ iÌ iÀ>ÊiiÀ}ÞÊÃÊ>ÊÞÕ}Ê`ÕÃÌÀÞÊ}L>Þ L>Ãi>`ÊiiÀ}ÞÊqÊ>ÊVÌÀ>LiÊ>`ÊVÌÕÕÃÊÃÕ««ÞÊ UÊ ÊVViÃÃÊÌÊvÀ>ÌÊ>LÕÌÊ6VÌÀ>½ÃÊ}iÌ iÀ>ÊÀiÃÕÀViÃÊ vÊ«ÜiÀ is limited 2.1 UÊ Ê6VÌÀ>Ê >ÃÊiÝ«À>ÌÊ>`Ê`iÛi«iÌÊ««ÀÌÕÌiÃÊ UÊ Ê Ý«À>ÌÊvÊ«ÌiÌ>ÊV>ÌÃÊvÊÌ iÊÀiÃÕÀViÊÃÊ Ê}iÌ iÀ>ÊiiÀ}Þ]ÊÜÌ ÊVÃiÊ«ÀÝÌÞÊvÊ«ÌiÌ>Ê ÛiÀÞÊiÝ«iÃÛi° geothermal energy sources to the electricity grid UÊ ÊiÌ iÀ>ÊiiÀ}ÞÊ >ÃÊLiiÊÕÃi`Ê>ÌÊ>ÊÃ>ÊÃV>iÊvÀÊ`iV>`iÃÊ in Victoria. Hydroelectricity Hydroelectricity is generated through the conversion of flowing water into electrical energy, often using dams to store the water. Victoria’s hydroelectricity is sourced from the State’s major dams, including Lake Eildon, Hume and Dartmouth. Hydroelectricity resources in Victoria Potential for growth Advantages Challenges to be overcome UÊ ÊÞ`ÀiiVÌÀVÌÞÊÃÊ>ÊÃÌÀ>LiÊvÀÊvÊÀiiÜ>LiÊiiÀ}ÞÊqÊÜ>ÌiÀÊ UÊ Ê} ÞÊ`i«i`iÌÊÊÀ>v>ÊÊ Þ`ÀiiVÌÀVÌÞÊ}iiÀ>ÌÊ >ÃÊ V>ÊLiÊ«Õ«i`ÊÌÊ`>ÃÊ­vÀÊiÝ>«i]ÊLÞÊÕÃ}Ê«ÜiÀÊvÀÊ Ài`ÕVi`ÊÛiÀÊÌ iÊ«>ÃÌÊ`iV>`i]Ê`ÕiÊÌÊiÃÃÊÌ >Ê>ÛiÀ>}iÊyÜÃ Ì iÀÊÀiiÜ>LiÊÃÕÀViîÊ>`ÊV>ÊLiÊÀii>Ãi`Ê>ÃÊii`i` UÊ ÊÌi`ÊvÕÌÕÀiÊÃÌ>>ÌÃÊvÊÃÌiÃÊLiV>ÕÃiÊvÊÌ iÊÌi`Ê UÊ Ê >Ê«ÀÛ`iÊ>ÊVÌÀ>LiÊÃÕ««ÞÊvÊ«ÜiÀ]ÊÜ V ÊV>ÊLiÊÕÃi`Ê ÕLiÀÊvÊÃÌiÃÊ>`ÊÌ iÊÛiÀi̽ÃÊVÌiÌÊÌÊÌÊ ÌÊ>ÌV Ê«i>Ê`i>`ÃÊ LÕ`ÊiÜÊ`>à UÊ Ê7 iÊÜ>ÌiÀÊÃÕ««ÞÊÃÊ>LÕ`>Ì]ÊÌÊ«À`ÕViÃÊ>À}iÊ>ÕÌÃÊvÊ UÊ ÊvÀ>ÃÌÀÕVÌÕÀiÊV>ÊV>ÕÃiÊ>iÌÞ]ÊÀiVÀi>Ì>Ê>`Ê iiVÌÀVÌÞÊÛiÀÞÊV i>«Þ° iÛÀiÌ>Ê«>VÌð 27 Part 2 Our future options Bioenergy Organic matter, or biomass, can be converted into bioenergy (heat, electricity and biofuels) using a variety of technologies.