Letter to the Honorary Ross Vasta MHR dated 9th September 2014
Thank you for your time with me today.
As requested, this email is to summarise our discussions and what I see to be the issues with removing or even making minor changes to the Renewable Energy Target. Before I do so, let me give you some of my credentials. I must stress, I am not speaking on behalf of any of these organisations. As you said, though, I am probably representing their views to some extent.
I am a director and public officer for the Australian Association for Hydrogen Energy. I am a member of the Australian Institute of Energy. I am the immediate past chairman of the Brisbane South branch of the Queensland Justice Association. I am a past secretary of the Wavell Heights branch of the Liberal Party. I currently work full time at the Mark Group as a technical sales advisor. I am a principal of InSynch Technology where we are currently developing software for the solar power industry, hopefully for local and international sales. I have spoken at conferences regarding energy solutions. I have advised Governments at all levels around Australia regarding fuel cell technology. I have prepared feasibility studies and planning reports for governments and major corporations in alternative energy solutions.
My meeting with you was to represent my own concerns, though. To summarise, I have no doubt at all that even the most minor change to the current renewable energy target will have a devastating effect on the renewable energy industry.
To go into some detail, the RET review, chaired by Dick Warburton, made a number of recommendations. Their first option, wiping out the RET completely (and immediately) would have the immediate effect of raising the cost of solar power systems for people’s homes by almost 50%. This will possibly even affect those who have already signed a contract but are not yet installed. This is in spite of his recommendation that those with existing contracts should still by entitled to their STC credits. If there is no Target, the STC certificates will lose their value immediately, meaning – no credit. There could even be the ludicrous situation where the customer is guaranteed for the value of their certificates but the retailers (and solar credit brokers) are not. If the price of solar systems rise by ~50% and then accounting for the potential exposure of the outstanding (now worthless) certificates held by the retailers / brokers, in my opinion, there will be very few solar power companies that will take the hit and survive.
The second option recommended suggested a gradual removal of the RET starting at an immediate 33% reduction in the number of STCs (from 15 years to 10 years). This is a direct price increase of over $1,200 for a 5kW system in Brisbane (if the STC value does not change). With another suggested option, that of allowing gas generators to apply for STCs, the value of the certificates could drop by another 50% due to the increased supply of the STCs. If the RET is changed from the current 41,000 GWhs by 2020 to a “true” 20% of our energy requirements, the demand for the certificates will slow down dramatically, again directly affecting their value and the cost of a solar power system.
I understand that it is the Governments policy not to change the Target as per their pre-election promise. I am concerned, though, about the definition of that target. The devil is in the detail. I also understand that the Senate will not allow the RET to be removed.
I hope that I am wrong in the following and that is that the Government can still make a number of changes to the SRES without going through Parliament to do so. I reiterate, any negative change at all will have a devastating affect on the industry and on my own potential to, firstly, keep my job, and secondly, have an industry to sell my software to.
We also discussed that there are other forms of energy that should be promoted and supported by Government to at least the same level as the fossil fuel industry, if not more so. On my own wish list are the following:
- No change to the RET or the SRES.
- Batteries for renewable energy storage – other governments around the world are actively pursuing and supporting battery story solutions. Almost 90% of the customers that I see now are asking me if battery storage is viable. Unfortunately, it is not right now for city based home owners. In 2-4 years time it should be price competitive with the grid. This will occur because people like Elan Musk are building GW sized battery manufacturing plants for lithium ion batteries. Although these are initially targeted at electric vehicles, the same batteries will be used in fuel cell vehicles and renewable energy systems. I would like to see the Australian Government offering subsidies towards the cost of these systems with a built in phasing out (so the the industry can plan ahead). The reason why this is important is because, as it stands in nearly every state in Australia, purchasers of new solar power systems, who are not home during the day to use their power, effectively forfeit it free of charge to the energy wholesaler. The wholesaler then sells this cheaply to the retailer who will on sell it to consumers at a massive mark up (usually above the standard price for fossil fuel based power because it is green power). I, personally, cannot understand why the ACCC or ASIC have not taken this rip off to court or why Federal and State Governments allow this to happen. On a related issue, I note that a number of countries are now actively pursuing battery storage solutions for electricity networks.
- Fuel cell technology. Australia has some of the world’s leading experts in this technology. Unless I have misread the public media relating to this, The Victorian based Ceramic Fuel Cell Company, part owned by the Queensland Government, has decided to concentrate on selling their products in Europe, particularly in Germany, instead of Australia. Many countries around the world have active programs supporting variations of this technology in a number of areas – fuel cell vehicles, small residential cogeneration fuel cells (similar to that of Ceramic Fuel Cells), large stationary fuel cells (defence, hospitals, resorts, waste water treatment plants, cogeneration systems in corporate estates). Countries supporting this technology are: USA, Canada, Germany, South Korea, Japan, UK and many more. In 2015 in Sydney, the international fuel cell industry will be coming here to us at the World Hydrogen Technology Conference which will be run by the Australian Association for Hydrogen Technology. Wouldn’t it be great to be able to have Greg Hunt up on the stage making an announcement for the world to see that we are supporting this exciting technology in very tangible ways? This could include: RET type subsidies, research investment by ARENA, federal or state feed in tariffs, demonstration sites. Please note that we have already had a number of very successful demonstration sites in Australia including even a hydrogen bus trial in Western Australia. In all cases, the technology proved to be very solid, clean and efficient. I am happy to arrange a meeting to discuss the benefits of this technology separately, if you wish.
- To risk ruining my copy book, I also cannot understand why it is so wrong to penalise companies who pollute our atmosphere and environment to the detriment of our health and, in some cases, our water tables. You may state that there are environment protection laws to cover these events but the pollution that comes out of a coal fired power station is apparently legal (no longer in the USA) and the ‘right’ to frack in the Great Artesian Basin is supported by State and Federal Governments in Australia (more and more countries are now banning fracking).
Ross, I appreciate your offer to ask the Honourable Mr Greg Hunt to call me to discuss these issues. It is a pity that I do not have the ability to travel to Canberra to meet with him in person (time, cost and employment commitments).
The World Hydrogen Technologies Convention 2015
In October 2015, Sydney will be the centre of the global hydrogen and fuel cell community.
The World Hydrogen Technologies Convention (WHTC), a leading technical and commercial event for the global hydrogen energy and fuel cell community, will be held at Australian Technology Park, Sydney on October 11-14, 2015, hosted by the Australian Association for Hydrogen Energy (AAHE).
The opportunity for Sydney to host WHTC could have not come at a better time. All the stars are aligned for 2015 to be a watershed year for hydrogen and fuel cells. Following the increased roll-out of commercial fuel cell products for the materials handling, telecommunications and distributed energy markets over the last five years, mass-produced fuel cell electric vehicles will be also available for the first time on the market from leading automotive OEMs including Honda, Hyundai and Toyota.
A clear trend is also emerging towards the integration of renewable energy and hydrogen as a key enabling pathway towards 100% renewable energy systems, offering uniquely versatile platforms for energy storage at both small-scale, remote area, and large-scale, utility-size applications, and a promising, robust solution for clean transportation.
Delegates and exhibitors visiting Sydney in 2015 will have a unique opportunity to learn about innovative applications for hydrogen and fuel cell technologies, explore cutting edge products and reach out to a wide audience of perspective suppliers, clients and partners.
We look forward to welcoming you to the Convention and to Sydney in October 2015.
Dr. Attilio Pigneri
Chair WHTC 2015
Launch of the Australian Association for Hydrogen Energy (AAHE)