Clean energy countries to prosper in 21st century

The countries that will prosper most in the 21st century are those that deploy technologies and products which decouple production from pollution, the Minister for Climate Change, Greg Combet, said.

To compete, Australia must transform one of the most emissions-intensive electricity systems in the world, he said.

“If we do not take action and decarbonise the economy, we will be unable to compete against modern manufacturing industries powered by clean energy,” he told participants at the Clean Energy Council’s annual conference recently.

So far Australia’s Renewable Energy Target (RET) scheme has led to the installation of over 740,000 solar hot water systems and heat pumps, which total 1600 MW of solar PV capacity.

Combet said wind power is also making a significant contribution, growing from around 100 MW of generating capacity in 2001 to over 2000 MW by 2011.

“Global investment in renewable power and fuels increased 17 per cent to a new record of $257 billion in 2011, with solar the fastest growing sector,” he said.

Responding to calls for the RET to be wound back because of the introduction of the carbon price, Combet said this approach is misguided. He said RET legislation and carbon pricing must work together to be effective.

“A carbon price without a renewable energy target means Australia would not achieve its goal of having 20 per cent of electricity supply coming from renewable sources by 2020.

“An energy target without a carbon price would increase the cost of achieving that goal. The two together will drive around $20 billion of renewable energy investment between now and 2020.

“Without a carbon price there is a significant risk that the $20 billion of investment will not be forthcoming.”

Combet said the International Energy Agency has consistently warned that for every $1 of clean energy investment delayed this decade, another $4.30 would need to be spent after 2020 to achieve the cuts in carbon pollution needed to avoid dangerous climate change.

Together, the RET and the carbon price are expected to leverage around $100 billion in private sector investment over the next four decades.

“Without the RET and the carbon price working together Australia will fail to deliver on its 20 per cent by 2020 target,” Combet said.

An Australian Energy Market Commission report found the additional RET costs to electricity consumers without carbon pricing would be in the order of $20 billion in 2010/11 dollars over the period to 2030.