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26 November 2008
I would like to begin by acknowledging the traditional owners of the land on which we meet, the Cadigal people, and pay my respects to their elders, past and present.
It is a great pleasure to be here to open your Asia Pacific region conference, and thank you Professor Deo Prassad, Professor Graham Morrison, Dr Gavin Conibeer and the ISES-AP08 Organising Committee for the invitation to speak.
It is very clear that we are entering a new era for renewable energy growth and deployment, informed by a changing awareness of the kind of world we inhabit, with new values and aspirations about the energy we use.
And of course we stand at a critical point in Australias response and the global response to the challenge of climate change, with issues like energy security, demand management and fuel poverty coming into increasing focus.
We are increasingly aware of the potential impacts of climate change on our environment and our livelihood; from the iconic Great Barrier Reef, to our farmlands, to our urban infrastructure, all are at risk.
For Australia, with our already weathered and dry continent prone to climate extremes like drought, the risks are magnified. As Professor Ross Garnaut has noted, compared to other developed nations, Australia has much to gain from an effective global response to climate change, and much to lose from continued delay.
We understand that Australias regional neighbours, the nations of the Asia-Pacific, are also acutely vulnerable to climate change impacts, for example from ocean acidification, sea-level rise and extreme weather events.
So the need for a comprehensive response to dangerous climate change a response that reduces Australias carbon pollution over time, that allows us to adapt to unavoidable climate change impacts and one that helps shape a global solution, is clearly understood. It is in this context of a comprehensive response to dangerous climate change that renewable energy technologies, including solar, have a crucial role to play.
From the boardroom to the classroom, and from the Cabinet table to the kitchen table, we all need to take responsibility for tackling challenges like energy security, and realising the benefits of solutions like distributed generation.
As locals doubtless know, we are just passing one year since the election of the Rudd Labor Government, in November 2007.
Prior to that election, we made a commitment, in our Solar Schools Solar Homes policy, that if elected, we would build a Solar Australia.
And that commitment was about providing the leadership to transform our homes, our schools and our communities into solar power generators, reducing household bills and supporting the growth of clean energy technologies; leadership that had been missing from Australia at a Federal level for more than a decade.
A key part of our commitment to a Solar Australia, more than 12 months ago, was that we would aim to double the approximately 30,000 solar rooftops around Australia within eight years.
It is worth reflecting that we are now on track to double that number by the end of the current financial year. That is, we will have achieved an eight-year goal in a little over 18 months.
When it comes to creating a Solar Australia, its a good start. But it is a small step compared to the scope of the challenge as the Government delivers an economically responsible and environmentally effective response to dangerous climate change.
Its also a small step compared to the opportunities we have to grow the green collar economy, mobilising skills and training for a clean technology workforce. As the Government brings forward a National Strategy for Energy Efficiency, I assure you these opportunities are front of mind.
In Australia, we are deeply engaged in the very long overdue steps to begin reducing Australias carbon pollution.
We are implementing a Carbon Pollution Reduction Scheme in 2010 - a cap and trade system to reduce greenhouse gas emissions at least cost.
This scheme will be the centrepiece of our efforts as we set about reducing Australias carbon pollution by 60 per cent of 2000 levels by 2050.
Next month, through Climate Change Minister Penny Wong, the Government will release the final design of our scheme through a White Paper.
The Carbon Pollution Reduction Scheme represents a profound economic reform.
It will mean, for the first time, that we recognise the real costs of using fossil fuels, and by implication, the very real benefits of switching to clean and renewable energy and enhancing energy efficiency. It will mean that renewable energy technologies, including solar, will compete on a playing field that is fundamentally transformed.
The Government recognises that in order to support this transformation, to help grow a vibrant renewable energy industry that fulfils its potential, we need measures that complement the Carbon Pollution Reduction Scheme.
A central complementary measure will be the expanded national Renewable Energy Target a target under which 20 per cent of Australias electricity demand will be met by renewable sources by the year 2020.
The Governments commitment will increase the legislated mandatory renewable energy target almost fivefold to 45,000 gigawatt-hours per annum by 2020.
The recent 2020 Vision report by Ernst & Young showed that to achieve the 2020 target of 20 per cent, more than half of all new electricity generation capacity installed in Australia until then will need to be renewable, requiring about $23 billion in investment.
This represents an enormous opportunity which will see renewable energy embedded as a seriously mainstream electricity source in our future energy mix.
We are no longer talking about the niche market of alternative energy.
Our objective is to stimulate significant early investment in renewable energy so that our renewable energy sector has a substantial platform from which to grow and be competitive against fossil fuels.
Without this market-based mechanism, it is unlikely we would pull through the early investment in renewables we need to transform our energy supply in a timeframe acceptable to an Australian community that is strongly supportive of climate change action.
It is also important to note that the Renewable Energy Target is a transitional measure, to be phased out between 2020 and 2030 as the Carbon Pollution Reduction Scheme matures.
And that is ultimately the foundation of a Solar Australia; because if you are genuine about brining renewable energy, including solar technologies, into the mainstream, then your aim must be to see them competing in the mainstream.
They must be recognised for their very real benefits in reducing carbon pollution, in providing distributed generation and in the case of solar thermal, the potential for baseload generation.
In short, renewable energy can no longer simply be a symbolic choice it must also be a competitive choice. And I can think of no stronger business case than harnessing one of Australias greatest competitive advantages sunlight.
The International Energy Agencys Scenarios and Strategies to 2050 report identifies photovoltaics as a significant player in the longer term, with the world PV market growing at more than 35 per cent per year over the last decade1.
In the 2008 edition of Solar Heat Worldwide, developed by the IEAs Solar Heating and Cooling program, Australia was identified as one of the most dynamic markets for solar thermal technologies in the world, specifically flat-plate solar hot water and evacuated tube collectors.
And it was particularly pleasing to participate in the launch of a new campaign to install evacuated tube systems, at Maroubra Surf Club in my electorate of Kingsford Smith last Sunday.
Those lifesavers are already enjoying 30 degree constant hot water once their days duties are done. We encourage other credit providers and solar suppliers develop innovative funding and delivery solutions.
Australias strengths in solar research and development are well recognised on the international stage. To mention just some notable examples:
There are notable successes, but it is fair to say that Australias track record in commercialising solar innovation leaves a lot to be desired.
And like never before, the solar industry is operating in a growing and competitive global market.
We had a stark reminder of that just last week, with the announcement the BP Solar would relocate its manufacturing facilities from Olympic Park in Sydney.
While the company has made it clear that this was a decision unrelated to domestic policy, the fact is, this was extremely disappointing, particularly for those workers who stand to lose their jobs.
Just two days later, Conergy announced sales growth in the current calendar year of some 85 per cent, and plans to expand its manufacturing facilities in Western Australia.
How do you square the circle here, at a time of unprecedented demand in the Australian consumer market for solar PV?
Well, we can accept that not every commercial decision will be related to domestic policy.
But we should also recognise that for 12 years we had a Liberal Party Government that consistently refused to expand the Mandatory Renewable Energy Target, despite the recommendations of its own review.
A Liberal Party Government that consistently rejected putting a price on carbon, despite receiving options almost a decade ago.
And a Liberal Party Prime Minister who went out of his way to marginalise renewable energy, talking up nuclear power at the expense of renewable baseload generation.
For 12 years, despite the best efforts of Australian renewable energy practitioners and innovators, there were no clear signals in the market, no momentum in the system and no certainty for investment. We continue to pay the price for those 12 years, and we cannot afford to let it happen again.
The argument from the Liberal Party and Mr Hunt now talking about a Solar Continent but continuing to delay and attack the introduction of a carbon price should be seen for what it is; a play for symbolism without substance, and the continuation of the last 12 years of totally inadequate policy with a bit of tweaking from a post-election focus group.
The Rudd Government recognises we have a clear role in providing long-term certainty for investment in renewable energy industries, and in removing barriers that prevent solar technologies from competing in the mainstream.
While the Carbon Pollution Reduction Scheme and the Renewable Energy Target will play fundamental roles here, the road to ensuring a future energy mix that includes renewables requires investment from early stage R&D through proof-of-concept to the demonstration of new technologies at a commercial scale.
The Governments new Energy Innovation Fund will provide $150 million over 4 years to support the research and development of clean energy technologies.
The Energy Innovation Fund includes $100 million for research and development into solar energy technologies, delivered through an Australian Solar Institute. The Institute will focus on solar thermal and photovoltaic technologies.
The Fund also includes $50 million for the Clean Energy Program to provide competitive grants for research and development in clean energy technologies in areas such as renewable energy and enabling technologies, energy efficiency and hydrogen transport fuels.
We expect the Energy Innovation Fund to sustain Australias world leadership in solar energy research and development.
Details of the fund are under development. It is expected that an announcement will be made in the near future, with the establishment of the Solar Institute and a call for Clean Energy Program grants expected in early 2009.
Beyond investment in R&D, we must ensure a pathway from research through to commercialisation. That is why in tandem with the Energy Innovation Fund, the Australian Government has established a Renewable Energy Fund.
The Renewable Energy Fund provides $500 million for a series of grant programs that will accelerate the development, commercialisation and deployment of renewable energy technologies in Australia.
The major component of the Renewable Energy Fund is the $435 million Renewable Energy Demonstration Program (REDP) which fills the gap between post-research and the commercial uptake of innovative renewable energy technologies.
The Program will demonstrate the technical and economic viability of renewable energy technologies through large-scale installations, such as solar thermal projects, across a range of geographic locations in Australia.
The program will stimulate over $1 billion of investment, with the private sector contributing $2 for every $1 we provide.
The first round of grant funds will be available to successful applicants in the next financial year.
In combination with a carbon price and the expanded Renewable Energy Target, the Energy Innovation Fund and Renewable Energy Fund will create much-needed momentum, not only to develop and commercialise, but to deploy solar energy technologies on an unprecedented scale.
So while we do stand on the brink of a very different landscape for renewable energy in Australia, the transformations have already started.
On July 1, the National Solar Schools Program opened for business, and is already well on track to making more than 9,000 schools around Australia solar schools. Solar Schools represents a commitment of almost half a billion dollars, and 40 per cent of this the best part of $200 million is earmarked for investment in solar power systems.
This program will dramatically increase the profile of solar power around the country, because wherever a child goes to school, in a few short years, when parents go to pick up their kids, they will see an array of photovoltaic panels on their schools roof.
Critically, my expectation is that this program will stimulate education authorities to embed education about renewable energy and energy conservation in a broad sustainability curriculum and provide first-hand learning experiences in renewable energy, and energy and water efficiency, for a generation of Australian school students.
The Solar Homes and Communities Plan is also having a major beneficial impact on the Australian PV industry.
Before the election, we undertook through the $150 million Solar Homes and Communities Plan to provide rebates for solar panels for up to 3,000 homes a year over five years.
We have exceeded this election commitment in our first year in office. Indeed, demand for the rebate is now running at unprecedented levels around 1000 applications per week.
We are seeing more applications in one month than we had originally budgeted for in one year and the program remains open for business.
I understand very clearly that the industry is seeking greater certainty about the investment climate for solar PV.
And lets face it, certainty has never been a strong point for solar rebates. The previous Government changed the program three times, and was reportedly preparing to dump it completely before doubling the rebate to $8,000 before the last election.
We have since witnessed an increase in demand of more than 30-fold, demonstrated by the fact that in 2008-09, the Rudd Labor Government will provide more funding and support more installations of solar panels than any year in Australias history.
Since the May Budget, our position has been clear and consistent. We did not leap to conclusions, or leap out of an aeroplane, like Opposition spokesman Mr Hunt, claiming the solar industry was in freefall when in fact it was clearly the opposite.
What I have done is undertake an extensive consultation exercise on household sustainability, with eight roundtables around Australia, including significant representation from the solar industry.
I have also had the chance to meet separately with a broad cross-section of solar industry practitioners and the engagement has been informative. For example, Dr Muriel Watt, Chair of the Australian PV Association, has emphasised the need for a strategic approach providing long-term certainty from research through to deployment.
I agree with Dr Watt. I also believe that we will not ensure a strong and sure footing for the solar industry by opting for quick fixes.
One of the great privileges of being elected to Government is participating in the crowded marketplace of ideas, a place of competing interests and policies.
There is no shortage of ideas and interests competing at the present time.
So naturally I want to emphasise that with the largest ever Commonwealth investment in solar power this financial year more systems going onto more rooftops with a carbon price and a significantly expanded renewable energy target on the way, the Governments focus is on reducing Australias emissions at least cost, and assisting households, particularly our most vulnerable, in the transition to a low-carbon economy.
What we must provide for the future, and what this Government will provide, is:
Future support for solar is being considered in the context of these processes, and as these considerations take place, the Government is committed to continue providing funding for those households who most need assistance with the up-front costs of solar panels.
Further support will be delivered through our $300 million Green Loans program, providing low-interest loans for up to 200,000 households to reduce their energy and water usage, including through solar PV, from early next year.
This is an innovative program because not only will it assist with up-front costs, it will also provide households with the information to make smart choices, and the ability to pay for sustainable improvements through savings in energy bills a model that I think has great potential for solar hot water and photovoltaics.
You will be aware that the Government is working with the States and Territories through the Council of Australian Governments to develop a harmonised approach to renewable energy feed-in tariffs.
In addition, we are continuing to support solar PV through the Renewable Remote Power Generation Program, which provides up to half the cost of solar power systems for people not connected to a mains electricity supply.
We have provided an additional $18.8 million for new Solar Cities in Perth and Coburg, Victoria. I am particularly enthusiastic about the Solar Cities program because of the learning opportunities that will evolve from the various models being implemented.
I am pleased to announce this morning a further boost to the Alice Solar City, with the Australian Government providing funding to support the construction of a large-scale, concentrating photovoltaic project.
This $6.6 million project will shortly be built near the Ilparpa sewage treatment plant and will consist of 26 Solar Systems dishes concentrating sunlight on highly efficient photovoltaic cells. This solar power station will be a significant landmark and contribute around 1,800 megawatt hours of clean power to the Alice Springs grid each year.
As I have said already, we are heading into a greatly changed landscape where the market conditions for renewable energy, including solar power, will look very different.
The main driver for this transformation is the need to take decisive and responsible action to address dangerous climate change.
If we are to harness the innovation of our renewable energy practitioners, grow our green collar economy, and most importantly, ensure a sustainable future, then the time to act is now.
I know those of you in this room are ready, willing and able to bring forward the innovations, the technologies and the solid foundations for a Solar Australia.
1Koot, Edwin. The Global PV Market: fasten your seatbelts. Analyses of market demand to 2010, July 2008. Solar Plaza.com.