Energy rule makers in Australia disappoints sectors in renewable energy

Author: Darvin Tocmo  Date Posted:15 December 2016 

The Australian Energy Market Commission (AEMC) fails to impress sectors in the renewables industry with their knowledge of technology costs.

The Australian Energy Market Commission (AEMC) fails to impress sectors in the renewables industry with their knowledge of technology costs.

Australia: The Ignorance of Renewable Energy

Solar developers and other players in the renewables industry have spoken about their disappointment in The Australian Energy Market Commission (AEMC). The commission is responsible for policies that govern Australia’s energy sector.

It should have a good grasp of the industry, including the costs of technologies. However, many point out the agency’s limitations particularly in wind and solar energy. The reports they have released apparently showed their ignorance of the renewables industry.

AEMC reports are far from credible

 First, there was the Emissions Intensity Scheme report which appeared to have a favorable outcome overextended RET despite being based on unbelievable Frontier Economics’ gas prices and estimates for large-scale solar costs. The renewable energy target came out as the cheapest minus these distortions.

Its annual consumer electricity prices review was also frustrating. Like the EIS report, it hit the headlines and displayed AEMC’s lack of knowledge about the industry. They showed renewable energy in a negative light based on ridiculous costings for large-scale renewables from – again – Frontier Economics.

Frontier is still assuming a 22% capacity factor which is not very updated. At least 26% will be available to current solar projects. ARENA projects may even get 30-32% capacity factors since they use single-axis tracking. This is probably why AEMC, using Frontier estimates, assumes that large-scale solar cost is around 50 percent more than it really is.

CSIRO and ENA and the Finkel reports

Renewables are a better option according to the CSIRO and ENA and the Finkel reports. Their findings were in stark contrast to AEMC’s. For them, the world changes and the technologies necessary to deal with the variable output of wind and solar are available now.

The reports also mentioned that storage can help change everything. They concluded that renewable focused grids will be a much cheaper option than business as usual or focus on coal and gas.

The main theme of the reviews is that it’s time for the country to create policies and changes that would enable these transitions to happen as efficiently as possible. The AEMC is obviously a hindrance, instead of being a catalyst in this.