Electricity generated from renewable energy can be a major tool in reducing greenhouse gas emissions, particularly given that electricity generation is an easier sector to decarbonise than transport or agriculture. Decarbonisation of electricity generation can play a major part in reducing Australia’s greenhouse gas emissions which are high compared to other developed countries, particularly in the electricity generation sector.

Australia has had a renewable electricity stimulatory mechanism - the Mandatory Renewable Energy Target (MRET) - since 2001 and is about to upgrade it with the introduction of the Renewable Energy Target (RET). MRET was supposed to lift the share of grid-connected electricity generated by renewable energy from 10.5 per cent in 1997 to 12.5 per cent by next year but by 2010 its market share will probably be about 9 per cent. The RET is supposed to lift the market share of renewable electricity to 20 per cent by 2020 but there is good reason to think this also will not be achieved. The failure, or potential failure, of both MRET and RET to achieve their goals throws up major questions about their specific design as well as about the design of renewable electricity stimulatory mechanisms in general.

These questions include how ambitious they should be, how they should treat pre-existing renewable electricity, how they interact with emissions trading, whether they should aim to stimulate more expensive and less mature types of renewable electricity, to what extent they should allow banking of tradable certificates and the penalties that should apply for non-compliance. Many of these questions come into sharp focus when a comparison is made between renewable portfolio standard mechanisms - which like MRET and RET dictate a quantity of renewable electricity but not a price - and feed-in tariffs, which dictate a price but not a quantity. For historic reasons most developed countries have had either type of mechanism for at least a decade now. The differences between the two are often exaggerated and their varying strengths often overlooked which means an opportunity is lost to incorporate some of the best features of each into the design of the other. Given that Australia is about to start its new RET, now is a good time for the country to reassess its renewable electricity stimulatory mechanism(s) and reassess where they are likely to take the country’s greenhouse gas reduction efforts.

For more information about the seminar see Fenner School Seminar link here.
Speaker: Greg Buckman
Date: Thurs 24 September 2009
Time: 1:00 pm to 2:00 pm
Location: Forestry Lecture Theatre, Fenner School

All welcome!