What’s the issue?
Now more than ever, Australia needs a government that looks to the future. Rather than attacking industries and closing them down, Labor’s strategy involves growing industries and creating more jobs whilst fostering a cleaner environment. This requires a long term vision and an understanding of the changes needed to secure Australia’s prosperity in the future.
One of the biggest changes impacting our economy will be climate change. This is driving the most profound restructuring of the world economy this century – the transition from fossil fuel-based energy to renewable energy. This is not a theoretical issue – it is happening now and it is accelerating.
A Shorten Labor Government understands the fundamental importance of this transition and the massive opportunities that it brings. We will put a strong renewable energy sector at the centre of Australia’s response to the challenge of climate change. This will create jobs, drive investment and push down power bills for families and small businesses.
Why is change needed?
The Abbott-Turnbull Government has done everything in its power to try and destroy Australia’s share in one of the world’s fastest growing industries with devastating consequences for our country.
Tony Abbott undermined the Small-scale Renewable Energy Scheme and the Large-scale Renewable Energy Target. The Liberal Government has tried to abolish the Clean Energy Finance Corporation who has mobilised $2.20 of private sector investment for every dollar it has invested in Australian clean energy projects. They have also tried to abolish the Australian Renewable Energy Agency thereby destroying our substantial R&D successes and, have made embarrassing statements about the ‘aesthetics’ of renewable energy.
In 2014, clean energy investment grew in China (32 per cent), the US (8 per cent), Japan (12 per cent), Germany (3 per cent) and the UK (3 per cent). At the same time, renewables investment dropped by 35 per cent in Australia. In fact, investment in large-scale renewable energy actually fell 88 per cent – from over $2 billion to around $240 million. Since the Liberals were elected, the ABS has found that about 15 per cent of jobs in the sector have vanished.
Responding to climate change
Transitioning electricity generation to renewable energy is also critical to dealing with carbon pollution. The electricity sector accounts for 33 per cent of Australia’s greenhouse gas emissions – the single biggest source of emissions.
In 2013, 195 countries, including Australia, committed to limit global temperature rise to below 2°C above the pre-industrial levels . Scientists warn if this 2°C rise in global temperature level is crossed, there will be significant consequences for the planet and people.
The Climate Change Authority has found that for Australia to achieve its bipartisan agreement to limit global warming by less than 2°C, renewable energy will need to comprise at least half of Australia’s electricity generation by 2030.
ClimateWorks Australia has modelled multiple energy scenarios for Australia staying within its carbon budget which is derived from staying within the 2°C target. In each of the modelled scenarios, a minimum of 50 per cent renewable power by 2030 is anticipated. These scenarios maintain the current structure of the Australian economy, economic growth at current levels and only use technology available today.
Leveraging our competitive advantages
Our continent is blessed with some of the greatest renewable energy assets in the world. More investment in Australia from large-scale renewables is expected given that we have the highest average solar radiation per square metre of any continent in the world. We are also one of the windiest places on earth . Australia’s potential for renewable energy generation is 500 times greater than current power generation capacity.
“Australia is lagging behind the world's major economies when it comes to renewable energy generation despite having enough renewable energy resources to power the country 500 times over.”
Tim Flannery and Andrew Stock, Climate Council
Getting our fair share of investment
When in government, Labor set an ambitious target of 20 per cent or 41,000GWh by 2020. This target has been exceeded, showing that when governments create the right environment investment thrives.
In 2014, new renewable energy investment outstripped new conventional energy investments for the first time globally, however here in Australia there was basically no new investment in renewables.
Every major economy is transitioning to renewable energy. Four of the world’s biggest economies have committed to add more renewable energy in the next 10 years than Australia’s entire electricity supply. China has announced that the quantum of zero emission generation capacity it intends to install by 2030 will be greater than all the coal-fired power plants that currently exist in China today and close to total current electricity generation capacity in the United States.
Australia is one of 144 countries in the world with a set of renewable targets - and Labor believes we should lead the world as a supplier of clean energy. Indeed Labor believes, we cannot afford to be laggards in this global race.
Global Renewable Investment Trends
Source: Bloomberg New Energy Finance, UNEP
The Liberals have caused considerable damage to renewable energy investment in Australia. When Labor was in government, Australia was ranked fourth in Ernst & Young’s Renewable Energy Country Attractiveness Index. Under the Liberals it has continued to slip and we now just make the top 10 in the world.
Labor has worked to re-establish certainty for the industry and ensure the continued investment in large-scale renewables to 2020. And we have always said that we set a strong commitment to renewable energy post-2020.
Our ambition is for Australia to be a front runner in renewable energy investment, lowering power prices, reducing pollution and importantly creating jobs to add to the 20,000 who currently work in the renewable energy sector. Most other major countries have ambitious renewable energy targets – and they are meeting them. And so will Australia under Labor’s strong leadership.
Comparison of Renewable Ambition
|Denmark||50% by 2020|
|California||50% by 2030|
|Germany||55 - 60% by 2035|
|Sweden||63% by 2020|
|New Zealand||90% by 2025|
|Norway||114% by 2020|
What is Labor's plan?
Labor wants to see 50 per cent of our electricity generated from renewable sources by 2030. This includes not just large-scale renewables but small and industry based generation. We want to see solar panels become the norm on the rooftops of Australian homes and businesses, with millions more to be built and installed over the next 15 years.
We want to see battery technology continue to improve so that electricity from solar panels can be stored in most homes and small businesses to lower power bills. We want to make sure that investors in windfarms and other renewable energy generators can be confident about investing.
Setting a long-term signal for renewable energy will attract investment. Over $2.5 trillion is expected to be invested in renewables in the Asia Pacific region to 2030 – it’s our job to make sure that that investment is made here. The renewable energy and energy storage industries present an enormous economic opportunity of the next several decades. More investment in renewable energy will lead to:
- More jobs for Australians.
- Lower power bills for families and small business.
- Reducing pollution and decarbonising our economy.
Change is already happening
In recent years, there has been significant uptake in renewables and will continue to do so to 2020. Bloomberg’s analysis notes that renewables generation in Australia will rise from 16 per cent in 2014 to 27 per cent in 2020 on current policy settings. The transition has already started strongly under Labor and continues even despite the best efforts of the Abbott-Turnbull Government to undermine the industry.
The prospects for renewables remain very strong with renewable energy generation set to increase its share of the energy mix over the coming decades on a ‘business-as-usual’ scenario.
Over the decade 2021-2030 renewable generation is expected will climb to 39 per cent of national electricity generation if the current policies are retained. By around 2035-2036, Bloomberg predicts that renewables generation will ramp up significantly to around 50 per cent of total electricity generation.
Labor wants to see that transition happen sooner.
Experience in this sector shows that technology is advancing rapidly, that the cost curves for renewable generation are declining at incredible rates and take up rates are increasing – all of which will support a faster transition. We’re seeing new advances in renewable energy come to the market every day at lower prices and we see renewable energy being used in things like electric cars.
Labor’s decision to set a goal that by 2030, 50 per cent of our electricity will be generated by renewable energy is based on expert advice. It is a challenging goal, but is very achievable with the right approach.
In addition to a federal Labor Government, State and Territory governments play a critical role in renewables policy and deployment. State and Territory Labor Governments are already contributing significantly to these goals:
- The ACT has a target of 90 per cent of electricity from renewable energy by 2020 – which it is on track to achieve.
- South Australia already generates around 40 per cent of its electricity from renewables, and the target of 50 per cent for 2025 is expected to be exceeded.
- The Queensland Government has set an ambitious renewable energy target of 50 per cent for 2030.
- The Victorian Government policy is a significant expansion of renewables.
- Working with these governments and adopting policies to assist them to achieve these targets will be part of Federal Labor’s plan.
The cost of energy from solar PV has halved approximately every seven years since the 1960s with more rapid reductions in recent years. In the last five years, solar PV prices have fallen by 75 per cent, and wind power costs have fallen by 14 per cent. Solar PV costs are projected to halve over the next five years, which would make it the cheapest form of electricity generation in many parts of the world. Globally, on a levelised cost of energy basis, renewable energy is now cost-comparative or cheaper than fossil fuels for generating electricity.
Energy storage is going to become an important global industry over the next decades. Australia presents one of the best markets in the world for this new technology. Labor sees the opportunities here and will develop an industry strategy to ensure Australia participates.
Over recent times the cost of battery storage has been halving every 18 to 20 months. Battery storage is growing and new products are dramatically cutting the cost of battery storage here by as much as 50 per cent. Pottinger analysis suggests that it will be cheaper to move off grid in downtown Sydney – with a solar + battery system – by as soon as the end of this year.
Unsubsidised Levelised Cost of Energy Consumption
Setting a signal for transition
In setting a signal to 2030, we have outlined our vision for renewable energy and our electricity sector. We want to work with the industry and the community on how we achieve this national goal. Transitioning to renewables won’t make a smaller electricity industry – it will make it larger but the structure will evolve over time.
Smart Australian businesses are already transitioning to renewable energy – we will implement policies to encourage this. Our largest electricity companies like AGL and Origin are making more investments in renewables because they can see where the market is going.
Australians households are overwhelmingly embracing renewable energy. Last year, households in Australia installed a rooftop solar system, on average, every three minutes. There are now over 1.3 million Australian households with solar power on their roofs from less than 100, just 15 years ago.
Flexible policy tools
By setting a strong commitment for renewables to 2030, we will provide more certainty for the industry. To achieve our goal that 50 per cent of electricity generation will come from renewable sources by 2030, a Shorten Labor Government will work the industry, stakeholders, the finance community, scientists, researchers and consumers to put in place the most appropriate policy settings.
Labor worked to restore certainty to the large-scale renewable industry to 2020. We will not undermine that certainty. That is why we have said we will take a holistic approach to achieving our 50 per cent by 2030 goal – involving not just large-scale renewable investments but also small and medium scale self-generation such as homes, small businesses like pubs and warehouses and even newer places like refuelling stations.
In developing our policy approach, we will minimise the impact on workers and communities affected by the transition in our electricity generation. We will ensure that consumers are empowered to pursue self-generation and that costs on business and households are reduced.
Labor will engage in a consultative and consensus approach to ensure any increase in large renewable energy capacity delivers investment confidence, and certainty for workers in existing generators.
Labor will work with stakeholders in a managed, predictable and long-term process to deal with the impact of the growth in renewable energy on existing generators and networks; to capitalise on the significant new job opportunities across the entire renewable energy supply chain from growth in the renewable energy industry; and to develop structural adjustment strategies and investment for communities impacted by change in the sector.
Managing the transition
Australia’s electricity sector is experiencing enormous change driven by a range of global and domestic trends, including the age of Australia’s existing generators, the rise in domestic gas prices, the growth in distributed energy – especially rooftop solar – climate change and the need to progressively reduce the electricity sector’s carbon emissions and advances in renewable energy, storage and smart metering technology.
The Liberal Government has failed to develop a comprehensive strategy to modernise Australia’s electricity system. Instead, the renewable energy sector has been rocked by the Liberal Government's reckless attacks and a hopelessly inadequate Energy White Paper.
A Shorten Labor Government will work with the industry, unions and other stakeholders to develop a plan for the orderly transition to renewables. Only Labor will look after the workers and communities affected by the modernisation of our electricity generating system.
Empowering households and keeping power prices low
More renewable energy leads to lower prices for consumers and small business.
The Abbott-Turnbull Government’s own review, which was designed to kill off renewable energy in Australia, found that power prices would be higher if the Renewable Energy Target was abandoned. That report noted ‘by encouraging additional renewable energy generation into the market and increasing electricity supply capacity, the RET is also exerting downward pressure on wholesale electricity prices’.
Bloomberg’s New Energy Finance has confirmed that power prices were unlikely to be affected from increasing renewable generation and the move to renewables would lead to more overall jobs.
All the studies show that an increase in competition from the introduction of a higher renewable energy target reduces the price of electricity because competing fossil fuel costs will also be forced to drop and this will result in a much better market that will reduce the price overall.