In August 2015, the Australian Capital Territory (ACT) government announced its plans to cover Canberra electricity production to 100% from renewable sources by 2025. The interim target of 90% renewables shall be reached by 2020.
Australia’s capital and the ACT provide advantageous framework conditions for these plans, possessing over a relatively small population – Canberra is home to 381.488 inhabitants (2013) – and little heavy industry. Particularly the latter, the absence of any domestic fuel industry, means rather negligible resistance against wind or solar projects in the ACT.
By implementing these plans, ACT and Canberra seek to become pioneers in decisively mitigating climate change and leading the expansion of renewable energy. In this way, the ACT Labor government also sends a contrasting signal to the national government of the Liberal Party and Prime Minister Tony Abbott, which are negating climate change and insist on energy production from fossil fuels, in particular by utilising coal.
In 2013, merely 47MW renewable energy was produced within the ACT, which is equivalent to just 0.3% of Australians total renewable energy capacity, mainly including solar energy (42MW) and no wind power. In order to cover the 100% within the proposed timeline, the ACT government chose a fundamentally different approach compared to other participants in the transition towards 100% renewable energy supply. To the most extent, Canberra simply covers the 100% through auctioning, meaning the purchase of electricity from several wind and solar farms. Until 2017, the government commissioned three solar and three windfarms to respectively provide 44MW and 200MW, which would already account for 60% renewables. Additional 200MW wind and 50MW solar capacity are supposed to cover the interim target of 90% by 2020.
In April 2016, these plans were significantly accelerated when the ACT government announced to cover the 100% already by 2020, bringing the initial target forward by five years. Favourable market conditions led the government to the decision to expand the currently running renewable energy auction process (ending today, 13 May 2016) from 109MW to 200MW. This decision enables Canberra to lock in beneficial long-term prices, creating a win-win between the City and the renewable energy providing companies, which are interested in the secure long-term contracts the government offers for 20 years, including a guaranteed payment for the power fed into the grid. In order to receive best possible bids, the system of reverse auctioning established under the Electricity Feed-in (Large-Scale Renewable Energy Generation) Act 2011 provides the basis for feed-in tariff competition. For instance, the wind auction for 400MW received more than 18 bids.
However, Canberra’s plans also affect the costs for the consumers, increasing the average annual electricity bill in 2020 by AUD $290, since coal-fired power is still cheaper in Australia than clean energy. These additional costs are supposed to be partly compensated by annual average savings of up to AUD $260 per household through the free replacement of downlights. At the same time, the bidding conditions include investments in Canberra’s renewable research programmes and the training of workers, as well as building of headquarters and maintenance facilities within the municipality. So far, AUD $400 million local investments were achieved in the auctioning process and Canberra demonstrates that renewable energy is achievable and affordable, delivering local jobs and benefits, although the electricity is mainly produced interstate.
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Wednesday, August 3rd, 2016