Australia Ready to Meet Goals for Renewable Energy

The Australian government has passed legislation that sets clear targets for the use of renewable energy.

CANBERRA, Australia – Two percent of the country’s electricity must be generated from renewable energy facilities within a decade, according to the legislation approved Friday by the Senate. The bill was one of the last pieces of legislation to be approved during a 24 hour session before the federal Parliament started a seven week break. The opposition party supported the legislation after it was amended to force an independent review of the law within three years. That review will assess whether the increased use of renewable energy is successful is reducing greenhouse gas emissions and encouraging additional generation of electricity from renewable energy sources. Environmental groups opposed the law because they said it would encourage the use of biomass as the cheapest option to meet the target, resulting in massive cutting of forest trees. They warned that the measures would discourage the development of wind and solar energy facilities. Before the legislation was passed, the Sustainable Energy Industry Association had predicted that the value of the Australian industry would increase to more than Aus$10 billion this year if the law comes into force. The value last year was$8 billion, says CEO David Abba, and the industry’s economic effect rose from $18 to $26 billion last year, to between $22 and $33 billion this year. The federal legislation will require electricity retailers to buy 9,500 gigawatt hours of power from renewable sources by 2010. The target was expected to be phased in starting next month, but the transition will start in July. The renewable energy industry says it is readying itself to meet the challenges of the two percent goal. Nineteen of the country’s suppliers are working to ensure mechanisms are in place that will enable a smooth and efficient market in renewable energy certificates, according to the Green Electricity Market (GEM) project. GEM will establish the world’s first industry governed green-e marketplace early next year by creating an Internet registry and exchange that enables participants to create, register and trade renewable energy certificates. The certificates are the instrument that underpins the Renewable Energy Target. GEM will help suppliers to manage their compliance and reporting requirements under the legislation, and will provide market mechanisms to support other green electricity regimes such as green power. GEM will also create a precedent for the trading of other environmental instruments, including certificates in carbon or salinity The self-regulated group attracted support from two other suppliers just before the legislation was passed: Tarong Energy of Queensland and CitiPower of Victoria. The other charter members are AGL Electricity; Aurora Energy; CS Energy; Delta Electricity; ENERGEX Retail; Eraring Energy (previously Pacific Power); Ergon Energy; Hydro-Electric Corporation; Macquarie Generation; Origin Energy Electricity; Pacific Hydro; Primergy; Powercor Australia; Snowy Hydro Trading; Stanwell Corporation; TXU Electricity (previously Optima Energy) and Western Power. “CitiPower has a strong record of initiatives and programs that have already made a substantial, positive impact on the environment,” says the company’s Steve Abbott. “We are already involved in sourcing electricity from renewable generation and we believe GEM will help achieve a reduction in reliance on fossil fuel generated energy and greenhouse gas emissions.” The GEM project is being managed by M-co, and the project will be opened to all industry participants once the design is established. The governance structure will come into force on January 24, and admissions to the market are expected in February.

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