The Queensland Renewable Energy Expert Panel has recently released their draft report into moving toward a 50% renewable energy target for the state.
The draft report, ‘Credible pathways to a 50% renewable energy target for Queensland’, was prepared following a comprehensive public consultation process.
The panel was appointed by the Queensland Government as part of their commitment to investigate the possibility of reaching this target by 2030.
Current infrastructure includes a project pipeline of almost 2,500 megawatts of committed and proposed large scale renewable generation capacity which exists primarily in regional Queensland. The draft report finds that falling technology costs and market dynamics along with this existing infrastructure means that Queensland has significant potential for progressively growing renewable assets in the medium term future.
The ambitious target set by the Queensland Government is expected to be equivalent to around 4,000-5,500 MW of new large scale renewable generation capacity between 2020 and 2030. These volumes will require significant government policy action to achieve.
Given the existing challenges in fulfilling the national Large Scale Renewable Energy Target (LRET) target in the lead up to 2020, the panel recommends that Government capitalise on available federal funding to bring more projects to Queensland and subsequently set an indicative target of 400 MW by 2020.
In the longer term, The Panel investigated three viable pathways for Queensland’s energy mix to meet a proposed 50% target by 2030:
- Linear pathway: Exhibits a uniform rate of uptake in renewable capacity between 2020-2030;
- Ramp pathway: An initial slower rate of renewable capacity uptake that ramps up later in the period in order to exploit the falling costs of renewable technology driven by learning curves; and
- Stronger National Action Pathway: Gauging how much additional incentives are required to achieve the 50% renewables target by 2030, if a national emission reduction scheme is implemented by 2020 to achieve a 45% reduction in emissions by 2030.
Based on economic modelling in the report, the panel predicts the proposed pathways are unlikely to have a price effect on consumers to 2020. Further to this, the linear and ramp pathways would be largely cost neutral to consumers to 2030.
It is estimated that the required subsidies from Queensland Government would be $50 million under the Stronger National Action Plan, $500 million under the Ramp pathway and $900 million under the Linear pathway. Reportedly, the cost neutrality would be maintained through market dynamics, and the suppression of wholesale electricity prices due to excess generation capacity by 2030 outweighing the cost of subsidies. It is forecast that thermal generators in Queensland would be losing between $600 and 1,100 million (NPV) to 2030 in operating cash flow under the pathways, however, no thermal plant retirement was modelled within this report.
It is noteworthy that Queensland government owns about two-thirds of thermal generation assets in Government Owned Corporations (GOCs).
The draft report can be found at http://www.qldrepanel.com.au/draft-report.
