Delivered by Kane Thornton, Chief Executive, Clean Energy Council
9am, Tuesday 23 June 2015
Check against delivery
Deputy Chief Minister Simon Corbell, Minister Lily D’Ambrosio, Senator Larissa Waters and distinguished guests.
Good morning, and welcome to the 2015 Australian Clean Energy Summit.
It has been a challenging 18 months for the Australian clean energy sector. But the importance of transforming Australia’s energy system has never been clearer. And our potential has never been greater.
We now have the opportunity to cement clean energy as a mainstream industry, creating jobs and building mainstream infrastructure.
So much of our past strength as a nation has come from our natural mineral wealth, and we should be grateful for the opportunities that this has given us. But the second mining boom is over: The price of iron ore has fallen. The price of coal is at rock bottom. And the value of our export gas is volatile.
We need new industries and ideas that can change the future of Australia.
One of the most important lessons of the last decade is that prosperity can be created through change. Some of those companies that have continued to challenge the status quo to lead that change are now household names: Apple, Google, Uber, Netflix, GE, IKEA.
We know what happens to businesses who don’t innovate. Think of:
- Kodak, who gave us generations of photographic memories.
- Blockbuster, where we went to rent DVDs.
- Borders, one of the first stores to bring together books and coffee.
They didn’t adapt. They didn’t stay ahead of the curve.
This is because past success is seductive. Once people believe they have found the formula for success they are reluctant to embrace change. But the status quo is a fortress that is impossible to defend. Rapid technological development, changing economics and changing consumer expectations mean that disruption is the new normal in the energy sector.
The Global Clean Energy Race
For these reasons there is a global race underway. US$310 billion was invested in clean energy across the world in 2014. Australia is competing for a share of this finite investment, resources, technology supply and expertise.
Every time Australia creates a positive headline in regards to the investment climate for the sector, business confidence takes a step forward. And with every negative headline, we go backwards.
18 very challenging months for the sector have taken a toll, with levels of renewable energy investment in Australia putting us below countries like Honduras and Myanmar. Australia’s investment in large-scale renewable energy last year was less than 0.1 per cent of the US$310 billion in global clean energy investment.
When the United States Government could not get the numbers in Congress to encourage more clean energy, they implemented regulations that would force coal-fired power stations to clean up or move out.
It is starting to feel as though the reverse is occurring in Australia. The Prime Minister admitted he was not able to reduce the Renewable Energy Target as much as he wanted due to the numbers in the Senate. So now we are seeing increased red tape for the wind sector and a change to the mandate of the Clean Energy Finance Corporation that will prevent it from supporting wind and rooftop solar.
When the winds of change blow, some people build walls, others build windmills. Opposing change will not stop it. It might slow it down, but it won’t stop it. So the real challenge for governments is how to manage the change occurring in the energy sector.
We need a vision for the Australian energy sector – one that drives policy decisions that link climate change policy with energy policy. How can anyone agree on the right rate of renewable energy deployment if you have no vision for transforming the energy sector or the level of long-term emission reductions needed in the energy sector? If you don’t know where you are going, any road will get you there.
Thankfully state and local governments have already chosen the clean energy road. The ACT has been a beacon, South Australia continues to lead the country for renewable energy deployment, while Victoria and Queensland are now looking to restore their leadership. NSW and Tasmania have made strong public commitments.
Our state governments understand the full benefits that renewable energy offers, particularly the investment and jobs in rural parts of the country where opportunities are otherwise sparse.
New Energy Choices in the Clever Country
Australia is a clever country. We are a proud country. We want to be inspired. That is obvious from the buzz that was created by Solar Impulse and Tesla’s electric vehicles and battery systems.
We have a clapped out old energy fleet that belongs in the Eastern Bloc, not in a sophisticated and clever country such as ours. With over half of our existing coal fleet beyond its operating life, and with one of the most carbon-intensive energy systems in the world, it is time to clean up and modernise our power system.
Australia is spoilt for new energy choices, with a suite of technologies now available. They are at different stages of development and each has its different challenges.
The most well-developed and cost effective of today’s renewable energy technologies are large-scale wind and rooftop solar. They have massive potential in Australia.
There are plenty of ways we can drive innovation in our technology and our business models to achieve greater efficiency and reduce costs. As distributed generation reaches greater scale we need to meet the challenge of how to embed it into our energy networks, and into an energy market that was designed decades ago. This will involve reforming the energy market to facilitate greater competition, more consumer empowerment and support for the transition toward clean energy sources of generation.
We still need new innovation, and we are fortunate to have both the Australian Renewable Energy Agency and the Clean Energy Finance Corporation to help us nurture our local innovators. These two bodies complement each other and the Renewable Energy Target to ensure a clear pathway for renewable energy technology. But anyone who suggests we should put rooftop solar or large scale wind on ice and wait for the next big thing, cannot be serious about the transition to clean energy.
The importance of public support
According to every opinion poll that has been done over the last five years, what Australians want is a cleaner, smarter energy system, with a greater role for renewable energy. Politicians ignore this at their own peril.
Never before have consumers had so much power, and they are choosing renewable energy. More than 2.3 million Australian households have chosen to install a solar power or solar hot water system. Millions more have chosen to embrace energy efficient appliances and, sometime soon, they will choose battery technology to store electricity produced by the sun, and use it when they want it.
These changes are gradually making our lives better. And they have made all of our biggest energy companies start a rapid rethink about what the future holds. There is a massive disruption of business models, because the status quo is impossible to defend.
But we cannot take this public support for granted.
As a sector that is growing rapidly, and is reliant – for now – on government policy intervention, we must continue to improve and evolve the way we interact with the community. It’s important that we put in the work now to get ahead of the game, and stay there. Some of the things the large-scale industry needs to consider are how we share information about our projects, comply with regulations, respond to the issues of noise and health and continuing to improve how we share the benefits from projects.
In rooftop solutions, the issues are different, but they are just as important to ensure the integrity of the sector. We must improve the way we interact with consumers, the quality and reliability of the products we use and the way they are installed.
The best approach for the renewable energy industry is if we can work together to continuously make proactive improvements to the way we do business, rather than waiting for governments to impose regulations on us that we may not like. We must continue to evolve and improve the way we work and interact with the community and our consumers.
Higher, Faster, Stronger
We have some of the most extraordinary renewable energy resources right in front of us. And we now have bipartisan support for a revised RET that will allow us to take full advantage of them. We need to double the amount of renewable energy across the country in the next five years.
The last time we had more than 20 per cent renewable energy was in 1979, a few years after the Snowy Hydro Scheme was finished, when our population was smaller and our thirst for energy was much more modest. And in a few years we will achieve this 20 per cent milestone again, some four decades on.
Along with the 2.3 million households embracing solar technology, more than 1800 wind turbines now generate clean energy across the country. We have two huge hydro-electric schemes operating in New South Wales and Tasmania, and a network of landfill gas and sugar cane bagasse plants across the country.
We have an industry employing more than 20,000 people which is passionate about what they do and wants to build a better, cleaner Australia.
With the RET debate behind us we can begin to aim for greater things, and raise our ambitions higher. We can now start to assess renewable energy targets beyond 2020 and what we need to do to get there and beyond. In the coming months we will finalise a roadmap with the help of the industry to lay out all the steps we need to take to truly change our energy system.
Over the next two days some of the leading policymakers and technical experts in the country will explore the many challenges ahead of us, and share their insights on how we can work together to overcome them.
It will not be easy, but this is an industry that has demonstrated a lot of resilience, courage and innovation during 18 months of adversity.
It is an exciting time to be in the clean energy sector. I look forward to working with all of you to make our industry stronger, and to achieve great things for this great country.