The governments of Australia and New Zealand (ANZ) are stepping up efforts
to cut back carbon emissions and increase the share of renewable energy in the
countries' energy mix. Australia has mandated that 20 per cent of its
electricity be generated from renewable sources by 2020 and to this end, has
introduced renewable energy targets (RET). This policy is the biggest incentive
for investments in wind power in the country. However, uncertainty in RET in
Australia and the absence of new policy approaches in New Zealand have hindered
the market from making optimal use of these policies.
New analysis from Frost & Sullivan (http://www.energy.frost.com),
Australia and New Zealand (ANZ) Renewable Energy Markets, finds that the
market earned revenues of $1.90 billion in 2011 and estimates this to reach
$5.04 billion in 2016.
Frost & Sullivan Research Analyst Subha Krishnan said that ambiguity in
RET has caused a reduction in the price of the renewable energy certificates
(REC) and made available surplus RECs in the renewable energy market. "Ever
since the RET target for 2020 was amended to provide a 'solar multiplier' for
roof-top solar systems, and some states introduced generous feed-in tariffs,
small-scale installations such as PV systems and solar hot water systems have
flooded the REC market," he stated.
"Among all renewable energy sources, solar photovoltaic (PV) had the highest
revenue share in 2011, while wind power is considered the lowest cost form of
large-scale renewable energy generation in the ANZ region," added Krishnan. "It
is noteworthy that Australia has some of the best wind resources in the world."
However, the targets for solar PV systems in Australia are not as high as the
targets of countries such as Germany and Japan, which are as high as 20.0 per
cent. Further, the focus on improving the installed power capacity through
coal-fired thermal power plants does not encourage project developers and
equipment manufacturers to increase the installed solar PV capacity.
Environmental concerns are expected to cause a shift in focus from
conventional power generation to renewable energy generation and thereby, make a
case for solar PV power. Meanwhile, in the wind power market, the demand
patterns have changed from small capacity farms to large capacity wind farms.
"The benefits of economies of scale have prompted the installation of large
capacity turbines over the last four years. This move has lowered installation
and generation costs, giving a huge impetus to the renewable energy market,"
To stoke higher adoption of renewable energy, Australia's parliament has
passed landmark laws to impose a price on carbon emissions in one of the biggest
economic reforms in a decade. They are aimed at making organisations more
energy-efficient and push power generation towards gas and renewable sources.
On the other hand, in New Zealand, the Government allows distributed
electricity generators to sell electricity back to the grid. However, to do
this, they must ensure that all generation that is injected into the grid is
reported to the reconciliation facility for the market on a monthly basis and
that generators obtain a certificate stating that their (metering) processes are
robust and accurate. These complex electricity buyback rules impose significant
costs and hence, are appropriate only for large generators.
"Despite their high costs, renewable energy systems have found considerable
acceptance among industrial end users, especially in urban areas," noted
Krishnan. "The economic benefits derived from green technologies will go a long
way in keeping the market dynamic."
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