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Australia's Solar Energy

The utilization of energy created by the heat and light of the sun and converting it into electricity is commonly known as Solar Power Energy. It was in the 1860’s when solar power technologies was first developed, arising from the distress of industrialist that the current coal, oil and fossil fuels supply would become scarce and limited. Thus, becoming more costly for individual households to afford.

The growing concern has then led to the re-evaluation and re-assessment of the international energy policies and regulations. According to the 2018 World Economy Outlook published by the Organization for Economic Co-operation and Development and the International Energy Agency, the global demand for energy increased by 2.1% in 2017 with a 398 GW of solar PV installed around the world, and, meeting the 2% of global electricity demand.

In which, the rate of installations are influenced by changes, alterations and updates in the policy mechanisms supporting such technology. Nonetheless, this trend is expected to significantly increase in numbers by another 25% by the year 2040.

As one of the fastest developing countries, the land down under has relied greatly on solar power energy as their preferred energy source for decades now. However, it was only then in the year 2015 when the age of solar power technology in Australia underwent a rapid growth. The increasing cost of energy resources like fossil fuels, has led to a significant number of households that are turning into solar energy. 

The emergence of government funded incentive programs for the incorporation of domestic and commercial solar power utilization also proliferated. Through the years, solar-powered technology has become Australia’s optimal energy source.

Geographically speaking, the Australian continent is known to have the highest solar radiation per square meter of any continent with an average of 58 million petajoules (PJ) of solar radiation per year, which is approximately 10,000 times larger than the country’s total energy consumption. This has helped increase Australia’s Gross Domestic Product (GDP) to $275 million for every petajoule of energy consumed.

To date, there are 2.15 million or 21% of Australian households are recorded to have Solar Photovoltaic (also known as solar PV) with a combined capacity of over 12.9 gigawatts installed on their rooftops that directly converts sunlight into electricity using a semiconductor cell or solar PV cell. This type of solar power technology is the most common and widely used in households.

Solar Power Technology in Australia

Like any other continent using solar energy, Australia uses  the two main types of solar-power technology in generating electricity. The Solar photovoltaic (PV) and Concentrated Solar Thermal (CST).

Solar Photovoltaic (PV)

The commonly used type of solar-powered technology is the Solar Photovoltaic (PV). It is typically encased in glass and aluminum frame to form a solar panel system (Solar PV panels). These solar PV panels are composed of solar cells that contain PV materials that converts sunlight into electricity without the use of fuels or emissions.

One or more solar panel system can be installed to cover a household roof that not only powers a single light but can actually generate electricity for the entire household, or be assembled into a large-scale solar farm that can generate hundreds of megawatts of electricity. The uncomplicated features of Solar PV that lacks of moving parts in the panels, and requires very little maintenance, with a life expectancy that could last up to 25 – 40 years has made it easy to provide solar power not only to households in the urban areas, but more importantly provide off-grid electricity generation in remote areas in Australia.

Concentrated Solar Thermal  (CST)

Is a type of solar power technology that converts sunlight into heat. Concentrated Solar Thermal (CST) systems makes use of mirrors (also called heliostats) to concentrate a large area of sunlight into a targeted location, thus, producing high temperatures. The heat captured with the help of fluids like oil or molten salt, can now be used to heat water and create steam that can power a turbine and, more importantly produce electricity while being stored for up to several hours and releasing their power output based only on grid demand thus, minimizing the volume of energy loss. Mostly all CST plants globally can store thermal energy for 3 – 15 hours . Heat produced can also be used to directly decarbonize some industrial processes.

However, due to its costly nature, this type of solar power technology is less used within the Australian electricity network compared to that of solar PV and wind technology. But, as the number of solar PV and wind energy added to the electricity system increases, the more opportunities for CST’s ability to store and dispatch energy when needed will be maximized. Thus, potentially lowering its market cost and eventually changing the future of CST systems.

Laws and Regulations Governing Solar/Renewable Energy in Australia

Solar and renewable industry has long been active for decades in almost all parts of the globe. In fact, more than ten countries are generating 15% of their electricity from wind, solar and renewable industry. Many household and large-to-small scale businesses has already used and maximized the benefits of solar power technologies. However, like the booming artificial intelligence industry, rules, policies and regulations that is set to regulate the solar and renewable industry is yet to be developed.

Existing government policies and programs like Australia’s Renewable Energy Target (RET) and the Clean Energy Initiative Solar Flagships Program by the Department of Resources Energy and Tourism has committed to create and develop awareness to the policy setting of the solar and renewable industry.

With the absence of a credible national and international climate long-term policy, states and territories within Australia are proactively pronouncing their continuous support in leading Australia’s electricity transition from fossil fuels to renewable energy and storage.

Renewable Energy Target

Over the years, the federal Renewable Energy Target (RET) which aims to reduce emissions from the electricity sector has been supporting the clean energy industry in building and enhancing skills and experiences that are necessary to encourage major new investments and support in achieving its goal to attain 100% clean energy by the year 2020 and be able to supply 33,000 gigawatt hours (over 23.5 per cent) of Australia’s electricity by next year.

The RET which is made up of two schemes: the Large-scale Renewable Energy Target (LRET) and the Small-scale Renewable Scheme (SRES). Recently, it was amended earlier this year with a goal to protect Australian jobs and help industries remain competitive by increasing assistance for all emissions-intensive trade-exposed industries to 100 per cent exemptions from all RET costs; to provide more certainty to industry and transparency to consumers and remove the requirement for biennial reviews of the scheme and replace them with regular status updates by the Clean Energy Regulator; and reinstate biomass from native forest wood waste as an eligible source of renewable energy, including the same safeguards that were in place prior to removal of this source from eligibility in late 2011.

Renewable Energy Target, then, has been the driving force for state and territories to further focus on directly and indirectly investing in renewable energy and energy efficiency projects that will cut carbon pollution and meeting Australia’s emissions reduction target.

The Large-Scale Renewable Energy Target (LRET)

Large-scale RET provides financial support and incentives to the creation, expansion and development of renewable energy power stations ( solar or wind) in Australia through the creation and sale of  large-scale generation certification (LGCs). Accredited power stations in Australia can create LGCs for the electricity generated from the power station’s renewable energy sources, for each megawatt-hour of eligible renewable electricity produced by an accredited renewable power station one LGC can be made. These LGCs can then be sold to liable entities (mainly electricity retailers), and companies, and individuals looking to voluntarily offset their energy use and emissions and then requiring them to surrender such certificates to the Clean Energy Regulator on an annual basis to meet RET scheme’s annual targets. LRET is created and designed to reduce emissions in the electricity sector and encourage additional generation from sustainable and renewable sources. With  the eye-catching incentives, large-scale RET is expected to create the majority of the renewable energy needed by 2020.

The Small-Scale Renewable Scheme (SRES)

Australia’s small-scale renewable sources holds one half of the Australian Government’s Renewable Energy Target with an estimated total of  $1.08 billion cost in 2018 and is expected to increase by 51% in 2019 totaling to $1.64 billion.

Unlike the LRET that focuses on renewable energy power stations, Small-scale renewable scheme (SRES) on the other hand is geared to create financial incentives for households, small businesses and community groups when they install eligible small-scale renewable energy systems like that of the residential solar panels, solar water heaters, heat pumps, solar PV, small-scale wind and hydro systems through a legislated Small-scale Technology Certificates (STCs). This renewable electricity in SRES replaces electricity generated from non-renewable sources.

Generally, householders who purchased these type of systems are given the right to create certificates to a credible agent in return for a lower purchase price. These certificates are created at the time of installation, and depending on the amount of electricity that these systems are expected to be produced or displaced in the coming days. Renewable energy target (RET) liable entities also have legal requirements under the SRES aside from the obligation under the LRET for them to be able to purchase STCs.

Not like LGCs, which is required to be surrender annually, the STCs are to be surrendered to the Clean Energy Regulatory on a quarterly basis. However, the benefits of such activity differs across the country and depending on the level of solar energy.

Australia's Solar Energy Statistics

As the catalyst of change, renewable sources have greatly impacted the previous years of Australia’s economy. A staggering 21% of electricity generation, the highest level based from the prior years, were derived from the solar and renewable resources and is now powering more than 10 million Australian homes. As it continues to help households and businesses manage costs, records show an average of six solar panels are being installed per minute in Australia last 2018. 45% of which came from the commercial sector and 43% from the residential sector. 

This record-breaking milestones gave birth to the doubled investments in large-scale renewable energy projects and programs since 2017. It has produced 14.5 gigawatts (GW) of lowest- cost type of new energy generation. More efficient large-scale wind and solar projects that will attract local and international capital are being built. Thus, potentially creating more jobs.

The Future of Australia’s Solar Energy Industry

With the rising market demands, complex technological innovations, shifting geopolitical landscape, environmental concerns, and the unprecedented energy evolution, transitioning to solar and renewable energy not just in Australia but globally, has significantly slowed. Results from the Energy Transition Index of 2019 showed that advanced economies like that of Australia ranked 43rd out of the 115 countries with a 64% score on the performance of their energy systems, and a remarkable 54% on their readiness in securing a sustainable, affordable and reliable energy future. Australia’s state and territory governments are now recognizing the importance of transmission for the energy transformation.

In July of 2018, the Australian Energy Market Operator released its very first Integrated System Plan (ISP) that will provide an integrated pathway for the development and creation of the transmission system for the National Electricity Market over the next 20 years. ISP also aims to identify, prioritize and optimize Renewable Energy Zones (REZs), or the areas with high quality renewable sources.

As we enter the new era in solar power’s history and as solar power continuously transforms the national energy market in the years to come, and, as 2020 nears,  the fear and uncertainty created by a less focused and elusive credible national climate and energy policy and regulations that will regulate and navigate through the solar and renewable industry, particularly in regional Australia, may potentially create an  uproar and might bring the said industry down the drain.

Heightened and focused interests in the betterment of Australia’s solar and renewable energy industry should be taken into consideration from time to time so as to closely monitor its developments as the 2020 deadline approaches.  

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