Australia’s Renewable Energy Target or RET needs to cover transport and heating energy like China and Europe. This is to increase the 5% approximation of all its renewable energy sources. In August 2009, an expanded RET was passed to ensure renewable energy would have obtained 20% of its electricity supply share by 2020. This might mean a large scale solar power energy scheme that should have more participation of businesses.
Australia’s Labour Government has committed to an increase of its gigawatt-hours or GwH from 9,500 to 45,000 by 2020, albeit the scheme is applicable until 2030. Most homeowners already have solar energy, but not all businesses have it. The higher cost of renewable energy infrastructure has Australian business owners asking questions about benefits which may be obtained from RET before they get involved with it.
What Business Owners Should Know About Large Scale Solar Power
If a business wants to use solar energy or already has it, any adjustments or changes in the RET will impact on business, as well as residential concerns. One of these concerns is whether electricity prices have increased because of the RET’s expansion. Two groups into renewable energy production may be able to shed light on this concern, one large and the other small.
Winds farms, large scale solar power plants, and hydro-electric projects are large producers of renewable energy, while households using solar panels may be considered producers on a small scale. To meet RETs, higher investments are required in large scale solar power production; building wind farms, for instance, or renewable energy power plants, is expensive.
Only Initial Costs are High
Traditional sources of energy such as gas and coal have lower investment costs, but the RET scheme has come up with incentives for businesses to make substantial investments in renewable energy sources. It is a fact, not a propaganda ploy, that while investments in RET sources may initially be expensive; these are produced from free elements like sunlight, wind, and the ocean, and would therefore create lower pricing later for consumers.
On the other hand, the inexpensive costs of infrastructure for traditional energy sources like gas and coal are negated by the high production costs of electricity supply, a condition which is passed on to consumers everyday when they use electricity. Energy retailers pass on the RET cost through retail pricing between 1% and 5% of a consumer’s electricity bill. In Queensland, for instance, the RET might cost a household at least $55.24 for an average year of energy consumption.
Following the Lead of South Australia
Lower energy prices may be possible if the amount of renewable energy consumption is increased in a market already using it in their systems. South Australia, whose 2020 target is around 33%, leads mainland states for generation of renewable energy, having reached 20% of RETs in 2011.
According to the Australian Energy Market Commission, which sets the guidelines for the Australian energy market and is an independent body, South Australia would drop its prices to 0.9% annually until 2016, a condition easily attainable by participation in a large scale solar power wholesale market.
