Why is it so bloody hard to bring renewable energy projects to fruition in WA?
PERTH, 31 May 2021
Last week in a public meeting held by renewable energy thinktank, Sustainable Energy Now, it was revealed that there were no commercial sized Renewable Energy (“RE”) projects in development or construction in the SWIS (Southwest Interconnected System), the equivalent in Perth of the NEM in Eastern Australia.
This position in 2021 (in a world beset with global warming) and the reasons behind it, were the focus of discussion in the meeting.
Sustainable Energy Now hosted three senior energy executives to answer this question. Together, they represented the entire spectrum of the energy industry with combined experience in utilities; commercial project development; system planning and engineering; and leading-edge renewables development.
Geoff Glazier, Managing Partner at Merz, Richard Winter, General Counsel and Company Secretary, Solar River Project and Rod Hayes, Chairman of Balance Group, gave their views and answered audience questions in an open, challenging, and positive session moderated by Sustainable Energy Now.
In addition to the shocking status, the biggest take away from the discussion was that there is an absence of a commercial structure that supports new energy. So, even though there are investors and funds available, being unable to forecast how much energy would be allowed to be input to the system stops any investment.
How can you enter an energy provision contract with Aldi, for example, if you do not know how much energy you are going to be allowed to sell to Aldi in future years? If you do not know how much energy you will be able to sell, how do you know how much revenue you will generate? It is impossible.
What has brought about the current situation?
It was noted that rather than rules changing to make it easier to add clean RE into the system, the opposite has happened, making it harder. Contracts and rules have changed from just a few years ago when you could at least forecast how much energy you would be allowed to be paid for.
The SWIS market is now the opposite of countries which offer clear conditions of investment, the ability to provide steady energy supply and be paid for it. After all the complaints about intermittent energy supply from RE, even steady energy supply is not guaranteed to be allowed to be transmitted in the current system, and rules can change any time, destroying investments. Participants noted that no sensible RE investors want to participate in such a system.
Right now, Western Australia provides no support and has no plan to bring RE onto the SWIS system.
While it may seem like RE is just being forced to compete on a level playing field, unlike the current energy providers, new energy providers have no idea how long the current rules will last for them and have no idea how much energy they can sell. The system absolutely supports current electrical generation, no matter what emissions may be and no matter what costs may rise to in the future. So, the recipients of electricity supply on the SWIS, from monopoly supplier Synergy, cannot choose cleaner power and are stuck with any increase in fossil fuel costs as has been happening.
In addition to the above, new energy applications are not exactly fast tracked. The slow progress of network connection applications and agreements often means that offtake commitments have lapsed before construction can begin. It is no surprise then that WA is not attracting the elite RE providers in the world to set up an office.
While it was agreed that a carbon price is an obvious missing factor, the current rules are a more subtle way of making sure RE projects do not go ahead in WA in 2021.
It was noted that, though it’s easy to understand the drive to ensure that the system must keep the lights on, in a climate emergency, other drivers should also influence the challenge of connecting renewable generating assets.
Sustainable Energy Now has been watching as the transition to RE is generating masses of well-paid highly skilled jobs in the rest of the world. To have that occur in WA needs a commitment to a transition and changes to the underlying laws and rules which support that.
The result of the current position, having undermined RE, rather than enabled it, is that the next commercial RE project is many years away. Getting big projects up and running does not happen overnight.
SEN Policies Required for 2021
SEN believes the following four policies need to be immediately implemented to ensure a rapid transition towards net zero emissions as we head toward the WA state election in March:
Long-Term Planning For A Major Energy Change Is Needed
Changes to the sources of energy in WA from the transition to renewable energy (RE) will be the biggest change since the arrival of the Internet and cannot be allowed to occur with little to no planning, if we want to see good results.
WA Should Target A Renewables-Led Jobs Recovery
Cheap, reliable, and abundant renewable energy that creates thousands of jobs and decarbonises our economy should be an easy target. There is plenty of data to show that transitioning through construction and operational management of new RE projects will provide many jobs.
Gas Producers Should Measure Their Emissions To Give Accurate Data
Producers must be held accountable for the carbon and methane pollution that occurs during exploration, extraction, processing and shipping but the first stage is accurate information on how much is produced.
WA Should Get Its Fair Share Of Federal Infrastructure Funds And Use Them To Help Fund The Transition
While Snowy 2.0 is being funded by the federal government for the eastern states, similar projects are not being funded in the West. There is a need to negotiate a better deal for WA. Federal funds could be used to strengthen the Western Power network in areas where cheap renewable energy can be added to ideal locations.
SEN Jobs Report 2020
14 September 2020
This report identifies new jobs resulting from the transition to Renewable Energy (RE) within the South West Interconnected System (SWIS) system. Our modeled transition to 90% RE by 2030 (including rooftop energy behind the meter) determined the following direct jobs:
- 55,100 job-years (2020-30) with an average of 5,000 jobs per annum
- 8,600 FTE jobs in 2030 of which approximately 2,700 would be ongoing operations and maintenance jobs
- Approximately 50-60% of the jobs created can be in regional areas
Ross Garnaut recording available
17 February 2020
The link to the recording and slides from Prof. Ross Garnaut's book launch in Perth "Superpower: Australia’s low carbon opportunity" is available from the SEN Events page.
SEN Submission to the WA EPA regarding Woodside's Browse and North-west Shelf Proposals.
13 February 2020
SEN Submission to the WA EPA regarding Woodside's Browse and North-west Shelf Proposals [PDF file, 1 MB]
Woodside’s proposed Browse Basin development will emit 4 gigatonnes of GHG pollution over its 30-50 year lifetime.
This includes 4.8 megatonnes of ‘reservoir CO2’ each year, which will be vented to the atmosphere.
It will increase by 19% the emissions needing to be reduced elsewhere by 2030 under Australia’s Paris target.
There are numerous flaws and misrepresentations in the Woodside proposals:
- They do not clearly report estimated methane emissions
- They under-estimate methane’s Global Warming Potential (GWP) by calculating the effect over 100 years instead of 20 years (over 20 years methane is 84 times more potent as a warming agent than CO2);
- They attempt to conceal the magnitude of the reservoir CO2 emissions;
- They use an unrealistic and discredited projection of global gas demand, which is at odds with other projections
Furthermore, Woodside is making no realistic attempt to avoid, minimise or offset these emissions.
Woodside repeatedly claims, incorrectly, that gas is 50% less polluting than coal. SEN’s analysis shows that gas is at best 25% less polluting than coal.
This massive gas development cannot proceed if the world is to keep global warming within 2.0ºC.
Sensitivity of Electricity Prices to a Carbon Price on the South West Interconnected System
31 January 2020
Sensitivity of Electricity Prices to a Carbon Price on the South West Interconnected System. SEN submission to Energy Planning WA.
Energy Policy WA has been developing a Whole of System Plan (WoSP), but a carbon price has not been considered in the modelling. This report argues that there are national and state requirements to manage climate risk, and provides a well-researched sensitivity analysis which shows that various levels of carbon price can add 20-50% to the wholesale cost of electricity. Our conclusion is that modelling and decision making which does not include consideration of a carbon price is flawed, given the size of the effect indicated by this sensitivity analysis. The report itself outlines some of the implications.
Joint Special Event JCIPP and SEN present Prof Ross Garnaut
Sustainable Energy Now (SEN) and John Curtin Institute of Public Policy (JCIPP) present Professor Ross Garnaut AC.
Professor Garnaut discussed his newest book "Superpower: Australia’s low carbon opportunity".
In the book, Professor Garnaut offers a road map for progress, covering energy, transport, agriculture, the international scene and more. Rich in ideas and practical optimism, Superpower is a crucial, timely contribution to this country’s future.
Slides and video links from the event on our events page.
SEN Submission to DWER intended to inform the formulation of WA Goverment's Climate Change policy.
6 Dec 2019
Among other things, the submission:
- quantifies the scale and scope of the emissions' reductions required to meet state targets. While SEN has responded within the context of the State’s emissions target, (which matches the federal targets of 28% reduction by 2030 and net zero by 2050), SEN has emphasised that much stronger action needs to be taken, along with a trajectory of reductions.
- summarises Negative Emissions Technologies and fuel switching approaches which can be applied or developed.
SEN has outlined targets that need to be met to meet the State's responsibility to meet WA's share of the national target of 28% emissions reduction over 2005 levels by 2030. To achieve this, the State needs to:
- Find 37 Mtpa of total abatement, to move from 88 Mtpa (in 2017) to 51 Mtpa in 2030.
- Reduce total emissions by at least 3.7 Mtpa CO2e per year between 2020 and 2030, equating to a total reduction of 37 Mtpa.
- Reduce energy sector emissions to 45 Mtpa by 2030, at a rate of at least 4.5 Mtpa CO2e per year. This figure is higher because some emissions are being offset by land use activities.
Submission to EPA on Greenhouse Gas Emissions Guidelines
2 Sept 2019
This submission responds to the Environmental Protection Authority consultation about Guidelines to consider greenhouse gas emissions in its future assessments of developments in Western Australia. SEN has reviewed the Guidelines in terms of the latest scientific understanding, agrees with their content as an appropriate minimum first step, and suggests some extensions to the guidelines.