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Investing in Renewable Energy
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What promotes investment in renewable energy?
• Reasonable return on equity
• Reliable and reasonably predictable revenue stream
• Confidence in plant output and operating costs
• Investor certainty (i.e. manageable risks)
• Social and environmental outcomes
The same as any other infrastructure investment!
The benefits of renewable energy
• Sound financial investment
• Zero greenhouse gas emissions
• Lower OHS risks than alternative fossil fuel generation
• Positive social and environmental outcomes
• Broader health benefits to community
Are others investing?
Investor sentiment today
• Looking brighter after much turbulence
• New investment is underwritten by the 20% renewable energy target by 2020
• Carbon price will improve investment certainty
• Banks are keen and super funds ($1T) getting interested
Lane Crockett Pacific Hydro
REC Prices
“Enhanced” RET announced
COAG review of RET announced
NSW G-FIT announced
Rudd Govt elected with 20% by 2020
target
Expanded RET legislated
Howard Govt refuses to increase MRET
Vic Govt wins election with VRET and NSW
RET announced
Underlying graph from Green Energy Markets Renewables Report
SA, Qld & WA support for state RET schemes
Market forecasts oversupply in ERET
design
Estimate of technology breakdown for 20% RET
Bloomberg New Energy Finance
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Bloomberg New Energy Finance
Levelised Cost of electricity ($/MWh)
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ATSE 2009
10
AGL, IES & Pacific Hydro
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What do Victorians want?
Survey question: If you had to pick one of these as your preferred option which would it be?
QDOS Survey June 2010
12
Renewable energy:
• Popular
• Good investment
• Creates jobs
• Clean and healthy
• No emissions!
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My ten minutes is up.....
Name of Speaker Document Title
14
Cost make-up of residential electricity tariff (IPART)
RET (thin wafer)
Retailer cost
Generation cost
Transmission cost
The National Electricity Market
The NEM is a dynamic network which has to balance generation to variable demand in 5 minute periods.
Name of Speaker Document Title 16
AEMO 2010
NEM already manages a high levels of intermittent generation
Name of Speaker Document Title 17
Renewable resources in Australia
Wind
• Lowest cost, lowest environmental footprint
• Around 7000MW of planning approved wind farm capacity in Australia
• May be limited by social factors
Renewable resources in Australia
Solar
• Current costs are high but falling rapidly
• Resource is highly confluent with load demand
• PV costs falling rapidly due to efficiency gains and volume capacity growth
• Solar thermal (with storage) - power can be dispatched into the grid
Opportunities for main technologies
Geothermal
• Vast resource
• Industry moving to conventional technology
• Power can be dispatched into the grid
Wave
• Large coastal resource