Solar Incentives Slashed Under New Rules

The Baillieu government has cut incentives for rooftop solar panels for next year as part of a shake-up of how small-scale renewable energy is priced in the state.

The changes reduce the Victorian feed-in-tariff for solar to eight cents for each kilowatt hour fed into the grid in 2013 - down from the existing rate of 25 cents - and fulfils recommendations by the state's competition advisory body.

The changes will not affect customers with existing contracts and tariff rates. Households that have paperwork lodged by September 30 with electricity suppliers can also still get access to the existing 25-cent tariff.

A review released today by the Victorian Competition and Efficiency Commission recommends a six-to-eight cents a kilowatt hour tariff be put in place, with the government accepting the top end of that range for 2013.

The tariff will then be adjusted by the government each year in 2014, 2015 and 2016 based on the wholesale electricity price, before moving to a fully floating market price in 2017.

The tariff scheme will also be opened to other forms of renewable energy systems generating 100 kilowatts or less.

The changes fall short of calls by the renewable energy industry that a fair rate of tariff for solar was 12 to 16 cents per kilowatt-hour.

Announcing the changes this afternoon, Energy Minister Michael O'Brien said the falling costs of solar panel systems and rising power prices meant households were taking up solar without the need for over-generous subsidies from other power users.

He said an older 60-cents per kilowatt-hour tariff — closed by the Baillieu government last year — would cost Victorian households $41 million a year to 2024 through electricity bills in subsidies to homes with solar panels.

"People in public housing, tenants who cannot access solar, are paying higher electricity bills in order to subsidise the rooftop solar for other people. Now that wasn't sustainable at those rates, they were over generous," Mr O'Brien said.

Labor's energy spokeswoman, Lily D'Ambrosio, criticised the decision, saying thousands of Victorian families were installing solar panels to reduce their power bills amid increasing cost-of-living pressures.

''The Baillieu government has again shown it just doesn’t care about supporting families who want to reduce their energy costs while also doing their bit for the environment,'' she said.

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Clean Energy With a Pinch of salt

A sodium-ion battery being developed in Australia is set to increase solar energy use and reduce our dependence on fossil fuels, according to researchers.

Although bulkier than commonly used lithium batteries, sodium-ion batteries will be cheaper, less toxic, and more environmentally friendly, said Manickam Minakshi, a chemistry and mineral scientist at Murdoch University, in Perth Australia.

“Our water-based sodium-ion battery has shown excellent potential for affordable, low-temperature storage,” he said.

Better batteries

Other batteries used for renewable energy storage – such as molten salt or molten sulphur – only work at high temperatures, making them expensive and impractical. Also, like lead-acid batteries, they are very corrosive and environmental pollutants, which aren't problems with sodium-ion batteries, said Minakshi.

The Murdoch team is now moving towards large-scale commercialisation, and the future could see these batteries connected to solar panels in every home. “This is a very exciting time,” said Minakshi.
The new sodium-ion battery has particular potential when coupled with the green power of solar energy. Widespread use of power from solar panels is limited because there are periods known as ‘non-generation’ times, when power cannot be produced. These include, for example, overcast weather or night-times.

Power in the dark

“Using solar energy panels to get power will only make sense when you can store the power when the Sun’s not shining,” said Stephen Thurgate, vice-president of program development partnerships at Sydney’s Macquarie University.

Murdoch’s new sodium-ion batteries could have applications in small networks with their own battery systems or ‘smart grids’ that use information and communication technology to reduce dependence on centralised power stations, said Thurgate.

While commonly used rechargeable lithium batteries have a higher voltage, making them more suitable for transport and vehicular power sources, they come with a lot of issues, said Minakshi.

Sodium: cheap and abundant

Lithium, for example, is more expensive and far less abundant than sodium in the Earth’s crust.
Another advantage of sodium-ion batteries is that they have a higher density, meaning they are able to store more energy for their weight. Combined with their low costs, they could open up affordable green energy to the developing world.

Lithium and sodium share similar chemical properties, but the sodium ion is 2.5 times the size of lithium, and a big challenge for the Murdoch researchers was finding a ‘host material’ for these large ions.

“Ions travel out of the cathode and into the anode to form a current,” said Minakshi. “As an imperfect analogy, you can think of them as mesh filters that ions pass through. We had to find materials with larger gaps in their mesh.”

Paving a path for alternative energy technology

Murdoch’s new development doesn’t spell the death of the lithium battery, which is still ideal for transportation because of its lighter weight, said Danielle Meyrick, deputy dean of the School of Chemical and Mathematical Sciences. “Sodium is slightly heavier and is much more suitable for stationary energy storage applications [such as] industry,” she said.

The sodium-ion technology could also enable the use of renewable energy in households, moving away from traditional energy generation sources.

“This kind of battery facilitates security of supply and continuity of electricity supply to households," said Meyrick. “It facilitates storage in times when there’s no sunlight, when there’s no wind, [and] when there’s no snow.”

Although there is more research to be done on finding the optimum scale of the battery and cell size, Thurgate said the findings were promising.

“The fact that [sodium-ion batteries are] based on readily available materials, that it’s an aqueous solvent [water-based] – so there’s no fear of the thing being flammable – [and] the fact the energy density is very high... are all great,” she said.

Strong on Solar: Australia Eyes CSP Leadership

A move into concentrating solar thermal power (CSP) could not only drive Australia's de-carbonization but establish a global technology lead, says a new analysis from the Australia Solar Institute.

Solar Dawn, as its name suggests, is a CSP project with aspirations as a catalyst. Based near Chinchilla — "Australia's melon capital" — in rural Queensland, at 250 MW, if completed its impact would be felt worldwide.

"Hugely significant for the industry" is how Dr. Keith Lovegrove of IT Power Australia describes the A$1.2 billion (US$1.2 billion) initiative. The scheme is backed by Australia's federal Solar Flagships Programme and the consortium behind Solar Dawn has dubbed it "the largest solar project in the Southern Hemisphere".

But, while Solar Dawn could bring up the sun for Australian CSP with a jolt, its chances of seeing daylight are fading. On 1 July 2012, the scheme missed an extended deadline for funding. The state of Queensland promptly withdrew its support, leaving a A$75 million (US$79 million) hole. "None of us knows what's happening," says Lovegrove.

But he would deny that Australian CSP's prospects are also dimming. Spectacular daybreak may look off the cards, but several glimmers of light are showing.

For a start, less ambitious CSP projects remain on track. Just down the road from the proposed site for Solar Dawn, the 44 MW Kogan Creek Solar Boost is now under construction. On completion, the hybrid plant will feed additional solar generated steam to the existing 750 MW coal-fired Kogan Creek Power Station.

In strategic terms, CSP's fit for Australia's meteorology, economy and climate objectives is also arguably as snug as a lifeguard's Speedos. In the recent report Realising the Potential of Solar Power in Australia, a team led by Lovegrove floats the idea of CSP providing up to 15 GW in "the near-to-mid-term".

Without a radical overhaul of its grid, Australia could have 2 GW in CSP by 2020 and 10 GW by 2030, according to the report's roadmap. In the longer term, the technology could meet half of the country's energy needs by 2050.

Letting the sunshine in

Blistering sunshine obviously figures in Australia's appeal for CSP. As a technology, concentrating solar thermal requires "excellent direct normal insolation from the sun, mostly met in the 15° to 35° latitude bands," in the words of the International Energy Agency.

But top solar locations are, almost by definition, a poor match with existing distribution and transmission infrastructure. Australian networks have developed to transmit electricity from large central generators near coal, gas or hydro resources. Electricity from CSP would need to flow over long distances in different directions.

To see precisely how well CSP could map onto solar resources and existing systems, Lovegrove's team examined the potential of various types of CSP, both off-grid and grid connected. The study concluded that 15 GW of CSP capacity could be achieved with "only modest grid extensions". Initial installations could cover hybrid systems at existing fossil-fuel plants and smaller off-grid plants for mines and towns. Further down the line, "nation-building" grid extensions could unlock more substantial solar resources.

Of this 15 GW potential, 8 GW would be high-capacity standalone plants with enough thermal storage to justify fairly modest grid extensions. Another 2 GW would be hybrid plants delivering steam to established coal-fired plants, while 3-4 GW would be standalone plants with capacities of 50-150 MW linked to existing grids. Medium-scale grid-connected and off-grid plants are also seen as likely to take off, although totalling less 1 GW of capacity.

Cleaning the energy mix

In any case, the hurdles to adding CSP capacity to Australia's grids could be overshadowed by the risks of sticking with fossil fuel. By coincidence, Solar Dawn's recent thunderclap broke amid a political storm over an attempted overhaul of the energy mix.

Also on 1 July, 2012, Prime Minister Julia Gillard's flagship Carbon Price came into force. From now on, the country's 294 top polluters must pay A$23 (US$24) for each tonne of carbon emitted, although the price is expected to ease from 2015. A glance at Australia's current energy mix reveals why the law's proposers were willing to brave fierce public opposition. Australia's 50 GW of installed capacity is among the world's dirtiest, with coal providing three quarters of electricity. In per-capita carbon emissions, Australia is the developed world's number one.

The new law - labelled the Carbon Tax by its many opponents - is aimed at cutting carbon emissions from 2000 levels by 5 per cent by 2020 and by 80 per cent by 2050. While renewables take on a larger slice of energy mix, a closure program for heavily polluting coal fired plants should help speed Australia down the league of top polluters.

In any cleaner generation future, solar power offers two advantages over other renewables. An analysis of electricity prices within a recent report for ASI by ROAM Consulting, Solar Generation Australian Market Monitoring, found that solar should prosper because its hours of peak generation coincide with peak demand. But CSP holds another ace in its ability to meet peak and baseload demand through storage.

Storing up baseload capacity

For now, in fact, concentrating photovoltaic (CPV) technology is making similar headway to CSP in Australia. Construction is underway on Solar Systems' 2 MW Mildura Solar pilot plant, where a 100 MW facility will be built if the demonstration project prospers. Yet basic economics could still favour solar thermal technology. "CSP without storage is twice as expensive as large-scale PV," says Lovegrove. "Why bother? The real reason is storage."

CSP technologies can feature thermal storage units. As heat can be stored far more efficiently than electricity, these plants open up a rare opportunity for renewables to provide baseload and peaking power. The value of CSP's capacity to meet demand could also rise over time. A future energy mix with more intermittent renewables such as wind would put a high premium on energy storage.

What's more, the ability to effectively time shift solar generation would also protect CSP revenues once more solar power comes on line, with additional PV capacity creating a bulge in daytime generation that would be expected to curb prices, cutting its premium. "Anything fixed in time of dispatch can cause a fall in pricing," says Lovegrove. "Storage means you can adapt to the new peak."

The "strategic" case for CSP

In addition, the ASI sees a strategic case for investing in CSP. "It suits Australia because we're sunny and have experience in power stations," says Lovegrove.

Solar Dawn would provide a showcase for home-grown compact linear Fresnel collector (CLFC) technology already in place at the coal-fired Liddell Power station and being installed at the Kogan Solar Boost. Areva Solar, which is driving both the Solar Dawn and Solar Boost projects, was formed by the purchase of Ausra Solar, a firm that originated in Sydney in 2002.

A lull in global CSP activity could also let Australia make its mark. "Nothing that Australia can do will affect the photovoltaic industry - which is now taken up by China - but one of our conclusions is that CSP offers an opportunity in a technology area that suits Australia," says Lovegrove.

In fact, rather than a crowded field, Australian CSP could emerge into a void. After driving the industry for many years, Spain's commitment to CSP could waver amid its on-going financial crisis. In the US, federal backing for CSP now looks uncertain. Increasingly, the industry is looking to India, where the Jawaharlal Nehru National Solar Mission aims for 20 GW of CSP and PV by 2022, as well as Middle East and North African states.

The prospects for Australian CSP technology in new markets such as India are buoyed by Areva's recent contract to set up two 125 MW CSP plants in Rajasthan. Areva will provide construction management services for the project, scheduled for commercial operation by May 2013.

CSP still too pricey

But one drawback outweighs the host of benefits that CSP could bring. ASI's report pegs the levelised cost of energy (LCOE) for utility-scale solar thermal at about A$250 (US$261)/MWh. Meanwhile, the maximum revenue in main grid-connected markets currently totals about A$120 (US$125)/MWh, including renewable certificates.

In fairness, the gap between CSP and fossil fuel is not as unbridgeable as these figures suggest. A complex study of potential revenue suggests CSP's ability to meet baseload and peak demand through being dispatchable doubles the value of its production. This "time value" means CST would have earned A$87 (US$91)/MWh over 2005-2010 while wholesale prices averaged only A$42 (US$44)/MWh.
But ASI Executive Director Mark Twidell identifies the gap between revenues on the market and the cost of technology as it moves from demonstration to commercialisation as "the critical issue facing CSP technologies".

"There is a range of market and policy drivers that will impact on the widespread, large-scale deployment of CSP but ultimately it is about bringing down cost and closing the cost-revenue gap, which is the responsibility of industry, government and the research sector," he says. An added challenge for CSP is the impact of Australia's commodity boom, which has pushed up the price of construction in the areas where new plants would go up.

Getting to the right price

The study projects that CSP will be competitive with Australia's grid at some point between 2018 and 2030. "There is a 90 per cent probability it will fall within that range," says Lovegrove. Rising demand and falling CSP capital costs would both drive this transformation. While real energy values are forecast to rise by between 1 per cent and 3 per cent per year, capital costs are predicted to drop by between 20 per cent and 50 per cent by 2020.

"CSP is right at the top of the cost curve," says Lovegrove. His optimism rests on the likely trajectory of global deployment as well as a SunShot Vision Study in the U.S., which found "heaps of opportunity to reduce the costs of various elements". In his view, the industry can reasonably expect costs to fall in line with those in the wind industry, giving a progress ratio (PR) of 0.8 or 0.9 with each doubling of installed capacity.

That said, the ASI hardly expects CSP to take off in Australia entirely on its own merits. The purpose of Realising the Potential of Solar Power in Australia is rather to alert authorities to the wider benefits of CSP so these can be rewarded.

A call for new policies

For now, wholesale electricity markets largely determine CSP plants' revenues, with renewable energy certificates adding about A$30-40 (US$31-41)/MWh. But Lovegrove argues plants' income should also reflect their specific advantages for networks.

As CSP plants are likely to be in rural or relatively remote locations, they could reduce high line losses. Installations could also earn additional revenues through reducing network costs by providing reliable generation at the end of near-capacity lines. Capacity value - the extent to which CSP can cut investment in other dispatchable systems - provides a further case for enhanced revenues. In addition, rising capacity of fluctuating renewables such as wind and solar PV could raise the value of ancillary services for balancing the grid, which CSP with storage is equipped to provide.
The ASI report advocates such technology-neutral incentives as one element in a four-pronged approach. Second, Lovegrove and his team suggest the sector aim to better communicate its value proposition to key organizations, retailers and financiers. They also call for "CSP-solar precincts" in areas of high solar resource, where connections for CSP would be provided to cut development costs. Finally, the report recommends a push in R&D to reduce costs and build confidence. Key areas where Australia could focus include deployments of less than 50 MW, fossil-fuelled hybridisation and advanced cooling technologies suited to water supply constraints.

Getting the message across

But will Australia's authorities heed the ASI's call? That may hinge on the next federal election, due by the end of 2013. The opposition led by the Liberal Party's Tony Abbott looks set to romp home. Which could be ominous for all renewables. Abbott has made a "pledge in blood" to repeal the Carbon Price. But Mark Twidell prefers to stress elements of consensus. "The independent Australian Renewable Energy Agency (ARENA), which has bipartisan support and funding legislated through to 2020, will make investments to develop renewable energy technologies and to help lower their costs, including meritorious CSP projects."

In his view, there is even hope for Solar Dawn. "The Australian government remains committed to the deployment of large-scale solar," he says.

Lovegrove seems more willing to acknowledges headwinds. "It's such an uncertain environment. If you ask most the key stakeholders, what they'd really like is some certainty, so that they can start planning. It's incredibly tricky to see what will happen." While "very, very optimistic" about the sector's global outlook, he is less sanguine about its future in his homeland.

"Whether Australia manages to shoot itself in the foot or not remains to be seen,' he says. On the upside, he sees potential for Australia to 'relatively easily" take a leadership role to become "a major, major player". But he admits that CSP's advocates have a complex message to get across."Everybody loves renewables in a motherhood sort of way, but very few people have cottoned onto the importance of matching demand throughout the day," he says.

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Low Income earners Burnt As Cost Of Solar Subsidy Spirals

RENTERS, pensioners and other low-income earners are paying for their wealthier neighbours to enjoy cheaper power under the state's skyrocketing solar subsidy system. 
 
The Queensland Consumers Association says costs to subsidise solar are forecast to triple, as the state's bill to fund the scheme continues to grow.

More than 100,000 applications were received last month from homeowners wanting to profit from the state's generous 44c per kilowatt hour tariff - twice the retail power rate - which will continue for 16 years.

By installing solar systems up to 5kW, the mostly well-heeled applicants stand to earn $200-$300 a quarter from a subsidy that is costing their non-solar neighbours more each year.

One of those who applied was Algester resident Ron Ruys, who feels badly for his neighbours who are indirectly helping to pay for a $10,000 5kW system that will earn him extra income.

"I'm going to do it and I'm going to make money out of it," he said. "But it is unfair to other people because of the subsidy. I don't think people know what the 44c means to their bill."

Energy Minister Mark McArdle has estimated the tariff would cost $1.8 billion by 2028 if the scheme remained unchanged. The July 9 deadline limiting future payments at an 8c cent rate.

The Government projects that the annual cost of the subsidy will rise from $50 to $100 for each household from the surge in applications, and another $50 for upgrades to the power grid.

Whether the increases will become a reality depends on whether the Government is successful in cutting expenses elsewhere in the budgets of power suppliers, including "community services".

Queensland Consumers Association vice-president Ian Jarratt said the threat of a $100 annual hike should be a concern for many people trying to stretch their income.

"A dollar is always more for a pensioner," he said.

The association said it voiced concerns about the scheme's cost several years ago to state officials. "Things had been done far too quickly and not thought through enough, especially about the cost to consumers who could not afford to install solar systems," Mr Jarratt said.

The solar scheme has had some benefits: creating employment for thousands of installers, reducing the state's dependence on coal and lowering carbon emissions.

Prices of home solar systems have dropped 50 per cent.

Installer numbers have increased from 78 in 2008 to more than 1100 today. The number of customers has increased from 1200 to around 180,000.

On the downside, "all Queensland households and small businesses indirectly foot the bill", Mr McArdle said.

The Government said it was obliged by legislation to continue the 44c tariff for the next 16 years, and risked lawsuits if it reneged.

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Subsidy Cut Halts Solar Expansion

A SOLAR panel supplier has axed its plans to expand into Queensland after the government revealed it would slash the benefit for supplying power back into the grid - from 44¢ per kilowatt hour to 8¢.

Madison Australia's rethink came as industry lobby group Clean Energy Council argued the policy change could put thousands of jobs at risk, saying householders would reconsider the benefits of installing solar panels given the time taken to recoup their investment.

But Energy Minister Mark McArdle described the solar industry as viable, saying the scheme needed to be changed because all energy users were paying extra on their power bills to subsidise the feed-in tariff for solar panel owners.

Mr McArdle announced yesterday the feed-in tariff for providing power back to the grid would be cut to 8¢ per kilowatt hour, but anyone already in the Solar Bonus Scheme as of July 9 would continue to receive the 44¢ benefit.

Madison Australia director Yorath Briscoe said his Melbourne-based solar installation and retailing company was about to sign contracts in coming weeks to expand into the Gold Coast market.

He said the company had been planning to directly employ six staff in Queensland and contract up to 18 tradespeople, but the cut to the feed-in tariff would hit demand.

“There's going to be massive demand the next 10 days but after that there will be nothing,” he said, adding the company would no longer pursue the Queensland expansion plans.

“It's quite shocking that a government would pull the plug like this.”

The Clean Energy Council said under the current Queensland system, an average householder would break even on the initial investment after 4.5 years.

The average payback period would jump to about 10 years under one scenario modelled in research commissioned by the Clean Energy Council before yesterday's announcement.

But the cost of buying and installing solar panels was expected to progressively decrease in coming years so the break-even point could be less than 10 years for future customers, a council spokesman said.