❓ Hon Robin Chapple questions the WA Government's commitment to renewable energy uptake following a BREE report indicating reduced renewable energy costs. The Minister responds cautiously, citing caveats in the BREE report and emphasizing commercial considerations for power providers.
AnsweredQoN 791Legislative Council
QuestionView source ↗
I refer to the report Australian Energy
Technology Assessment (AETA) 2013 Model Update released in December 2013 by The
Bureau of Resources and Energy Economics (BREE), which revised the cost of
renewable energy as being significantly lower than originally costed in the
AETA’s 2012 report, and I ask: (a) what is the Western Australian Government doing
to foster the uptake and production of renewable energy in Western Australia; (b) does the Minister now concur with the BREE
findings that some renewables are now competitive options for energy production
in Western Australia; (c) if yes to (b), what positive actions is the
Minister taking with the power providers to ensure that renewables become a
significant part of their energy portfolios; and (d) if no to (b), why not?
Technology Assessment (AETA) 2013 Model Update released in December 2013 by The
Bureau of Resources and Energy Economics (BREE), which revised the cost of
renewable energy as being significantly lower than originally costed in the
AETA’s 2012 report, and I ask: (a) what is the Western Australian Government doing
to foster the uptake and production of renewable energy in Western Australia; (b) does the Minister now concur with the BREE
findings that some renewables are now competitive options for energy production
in Western Australia; (c) if yes to (b), what positive actions is the
Minister taking with the power providers to ensure that renewables become a
significant part of their energy portfolios; and (d) if no to (b), why not?
AnswerView source ↗
Answered
3 April 2014
Responded by
Leader of the House representing the Minister for Energy
Response time
35 days
(a) The State Government's Renewable Energy Buyback Scheme encourages the installation of small-scale renewable energy systems by requiring Synergy and Horizon Power to purchase electricity supplied to the grid by eligible systems.
Synergy and Horizon Power have invested and contracted on a commercial basis for large-scale renewable energy projects to comply with the Commonwealth Government Renewable Energy Target Scheme. The manner in which the corporations meet their obligations under the Scheme is a commercial matter for these businesses.
(b)-(d) The Minister does not consider that BREE's heavily caveated report provides sufficient justification for its findings to be correct in all instances in Western Australia.
The Australian Energy Technology Assessment uses a 'levelised cost of energy' to compare the cost of large-scale electricity generation technologies. The Commonwealth Bureau of Resources and Energy Economics provided multiple caveats on this form of modelling in the
Australian Energy Technology Assessment 2013 Model Update
, including that:
- the modelling results do not account for site-specific factors when constructing an actual power plant;
- the costs associated with integrating a particular technology in a specific location to a specific electricity network were not considered;
- the modelling results do not necessarily provide a reliable indicator of the relative market value of generation technologies because of differences in the role of technologies in a wholesale electricity market;
- many technologies involve additional integration costs in order to be able to reliably supply electricity to a distribution system; and
- the value of variable (intermittent) power plants will depend upon the extent to which such plants generate electricity during peak periods and the effect that these plants have on the reliability of the electricity system and the resultant costs.
In the publication outlining the latest modelling results, the Commonwealth Bureau of Resources and Energy Economics also notes that:
- investors need to consider other criteria such as site-specific costs, technology performance characteristics and experience with the technology, prior to any final investment decision; and
- modelling estimates illustrate potential and relative "off-the-shelf" cost-competitiveness, rather than a firm predictor of market outcomes or the commercial viability of individual projects.
Synergy and Horizon Power have invested and contracted on a commercial basis for large-scale renewable energy projects to comply with the Commonwealth Government Renewable Energy Target Scheme. The manner in which the corporations meet their obligations under the Scheme is a commercial matter for these businesses.
(b)-(d) The Minister does not consider that BREE's heavily caveated report provides sufficient justification for its findings to be correct in all instances in Western Australia.
The Australian Energy Technology Assessment uses a 'levelised cost of energy' to compare the cost of large-scale electricity generation technologies. The Commonwealth Bureau of Resources and Energy Economics provided multiple caveats on this form of modelling in the
Australian Energy Technology Assessment 2013 Model Update
, including that:
- the modelling results do not account for site-specific factors when constructing an actual power plant;
- the costs associated with integrating a particular technology in a specific location to a specific electricity network were not considered;
- the modelling results do not necessarily provide a reliable indicator of the relative market value of generation technologies because of differences in the role of technologies in a wholesale electricity market;
- many technologies involve additional integration costs in order to be able to reliably supply electricity to a distribution system; and
- the value of variable (intermittent) power plants will depend upon the extent to which such plants generate electricity during peak periods and the effect that these plants have on the reliability of the electricity system and the resultant costs.
In the publication outlining the latest modelling results, the Commonwealth Bureau of Resources and Energy Economics also notes that:
- investors need to consider other criteria such as site-specific costs, technology performance characteristics and experience with the technology, prior to any final investment decision; and
- modelling estimates illustrate potential and relative "off-the-shelf" cost-competitiveness, rather than a firm predictor of market outcomes or the commercial viability of individual projects.
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