Expert urges new govt to encourage green energy

[Opening and Keynote speeches follow]

Media statement

For immediate release 11 December 2008

International expert urges new government to encourage green energy

New Zealand could easily generate all its electricity from renewable sources within twenty years with the right support from government, a leading overseas expert in green energy said today.

“I know the target is 90 per cent, but New Zealand could easily get to 100 per cent renewables by 2025 and have a more reliable configuration of renewable plants,” said Dr Benjamin Sovacool. “There is certainly the potential for New Zealand to be a world leader.”

Dr Sovacool was speaking at the annual conference of Sustainable Electricity Association New Zealand at Te Papa, Wellington this morning. He is a Singapore-based academic and author of The Dirty Energy Dilemma: What’s Blocking Clean Power in the United States (2008). He is a leading researcher on how countries can overcome the barriers to faster uptake of small scale renewable energy such as solar power and micro wind turbines

Dr Sovacool said the most effective support mechanism common in all countries is the feed-in tariff – a regulated renewable energy payment requiring electricity retailers to buy power from households and businesses which generate their own renewable electricity at a rate several times the normal retail rate. This provides a quicker pay back on the capital costs of the technology, with the cost spread over all customers. They all pay a little bit extra. It costs the government nothing.

“Even more compelling, FITs save both customers and power companies money because they displace the need to rely on coal or natural gas generators. In 2007, for instance, Germany’s FIT cost customers about 3 billion euros, but saved them about 9 billion euros in displaced fuel costs, lower levels of imported fuel, and cleaner air.

“FITs are also less onerous than other mechanisms – they don’t tell people where to put their generation, that’s left up to individuals because they know best.

“It’s a win-win situation for customers, utilities, governments and the environment. For example, Germany is on track to be one of the lowest emitters of CO2 in Europe per capita.”

Germany has used FITs for the past 17 years. Now the renewable energy industry employs over 250,000 workers, has significantly reduced carbon dioxide emissions by 115m tonnes a year, and earns billions each year by exporting the technology.

“By 2015 there are expected to be 700,000 jobs making it bigger than the automobile industry.” He said in Canada the introduction of a FIT in 2006 increased the amount of solar power by nearly twenty fold in just one year.

“FITs are very effective at deploying renewables quickly.” He said the key to their success was that customers which generated their own power had long term contracts for twenty or thirty years so that they had a predictable revenue stream to give them the confidence to invest.

Energy security was also a big advantage he said. “By diversifying the types of fuel you have you insulate yourself from any fuel that may be less reliable.”

The evidence around the world was compelling. “International experience suggests a FIT is a free lunch you get paid to eat.”

Earlier, in opening the conference SEANZ Chairman Brendan Winitana called on the government to kick-start the fledgling industry with direct support in line with many countries around the world.

He said the economic benefits were obvious from jobs, innovation, skills training, exports as well as the energy and environmental spin-offs from greater security and lower emissions.

“Germany, Italy, Japan, France, Austria, Spain, Bulgaria, Czech Republic, Australia, Luxembourg, Belgium, Greece, Portugal, Israel, Netherlands, Slovenia and the USA are countries that bear witness to this as they all have flourishing renewable generation industries.”

Germany and France are providing real leadership he said. “Closer to home, last month the New South Wales government announced it would introduce a feed-in tariff in 2009 to encourage people to fit their homes with solar PV. Any leftover energy could be exported back to the grid, earning the homeowners a fistful of green dollars.”

It was time New Zealand made up the lost ground he said. “The more power companies buy from those generating power (in a micro generation environment) the less they will earn in dividends. That may be a downside for state owned power companies, but the bigger net effect on the economy has got to be weighed up.”

ENDS

Note

Benjamin Sovacool is currently a Research Fellow in the Energy Governance Program at the Centre on Asia and Globalization, part of the Lee Kuan Yew School of Public Policy at the National University of Singapore.

www.seanz.org.nz

Note

Small scale renewable electricity or distributed generation refers to compact technologies that generate electricity within or close to the domestic or commercial property where it is used or a commercial installation servicing a community through local lines.

• Photovoltaic solar power – special solar cells convert the sun’s energy directly into electricity.

• Small scale wind power – small turbines convert wind energy directly into electricity.

• Small scale hydro power – compact micro and mini hydro units convert the potential energy of water into electricity.

SEANZ members include:

Meridian Energy, Vector, Mighty River Power, Contact Energy, Sharp Corporation of NZ, Black Diamond Technology (BDT), Tyco Electronics, Industrial Research Ltd (IRL), Electricity Supply Industry Training Organisation (ESITO), University of Otago, Orion Group, BP Solar (Australia)

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[SEANZ08 Opening Speech - Winitana]

SEANZ08 CONFERENCE

BW OPENING ADDRESS

OPENING SLIDE

Tihei Mauri Ora

Ki a tātau ngā kanohi o mua, ngā rauru whakaheke o ngā hapū huri noa

Mai i te Waikaremoana ki Maunga Pohatu – Tēnā tātau katoa!

Ko te uri tēnei a Ngai Tuhoe e mihi atu nei

Ki a koutou ma, he mihi nui kia koutou aku rangatira,

kia koutou aku manuhuri tuarangi,

tena koutou, tena koutou, tena ra koutou katoa

To our overseas guests, our resident presenters, and SEANZ members, to all SEANZ08 attendees from both abroad and local, and to our sponsors and industry partners, it is absolutely fantastic to see you all here. This is a mission accomplished part one – as the last several months has been about “herding cats” and getting everyone here in the same room. So on behalf of SEANZ, it gives me absolute pleasure to welcome you all to SEANZ08 in this the second year of SEANZ operation.

SLIDE 1

As a new organisation working to bring together stakeholders in an emerging industry sector and to build robustness within the industry, we would like to share with you the pathways to assist an drive industry development, to take action to achieve the outcomes we set ourselves and the challenges and solutions that we face in doing this. It has not been easy to reach this horizon and this stage of SEANZ development and there will be significantly harder yards ahead of us to reach the next horizon. So we thank you very much for your support with your attendance at SEANZ08. There is much untapped potential to grow this sector of the industry and with the assistance of the Minister Mr Brownlee, we know it can contribute enormously to the local economy. Turning on the growth engine in the words of our new Prime Minister is what SEANZ aims to achieve for its members.

SLIDE 2

So on that note let me please set the scene for you - In the last several decades, the process of moderation of the electricity market has caused constant growth of the micro, distributed and embedded generation in many countries globally. This is thanks to the drivers and agenda’s of governments, the support policies and renewable energy policies promoted worldwide, all with the aim of facing the challenge of the permanent increase of prices of fossil fuel based energy and the environmental issue - climate change. As an example, in 2001 the European Community officially recognized the need to promote renewable energy generation as a priority since its use and exploitation would lessen the dependence on oil supply from other countries, contribute to environmental protection and sustainable development and made it possible to meet Kyoto targets more quickly. Micro, distributed and embedded generation was part of this.

SLIDE 3

Within various renewable based technologies, solar photovoltaic (PV) seems to attract major attention from all corners of the earth due to its properties and potential of contributing a major share of renewable energy in forthcoming decades. The most appreciated advantage of PV is of course the fact that it is free, abundant and it’s an inexhaustible source of energy, for as long as the weather allows it to be. But we all know that.....don’t we? PV systems do not require expensive maintenance; can be easily integrated into buildings with no or minimal environmental impact, can be aesthetically pleasing and can contribute positively to the power required to operate in the built environment. Wind turbines, micro/mini hydro appear to attract less attention but are just as important as each technology can support the other in terms of a consolidated micro, distributed and embedded generation solution approach. However there are other renewable energy technologies that can contribute including CHP, (combined heat and power) biomass and biogas to name a few.

SLIDE 5

These technologies today may not necessarily be as cost effective as we would like and the business case for the consumer to install them is sometimes beyond reach. One fact we do know however is that this point discourages and limits the uptake of grid-connected systems. Industry development is strongly linked and connected to finance related strategies for the consumer actioned and promoted by Governments. This fact has been proven globally time and time again. Let me share an example of what could be with you. Consider this.....We understand that last winter in NZ with the insecurity of supply of power given this countries continued dependence on centralised hydro power generation, a request was made to secure $55 to $100m dollars to operate a thermal powered station in Taranaki for one NZ winter. For $55m SEANZ members could supply, install and maintain around 6 MW of micro-generation using PV and Wind at 5.6 GW hours based on today’s prices. That’s enough electricity to power over 700 homes. And it would operate for not one winter but for 25 years plus. And the funds would contribute to local communities and their local economies around the country. And the funds would not go off-shore to overseas based and owned fossil fuel subsidiaries! And there are no environmentally harmful emissions to measure. So NZ incorporated lost out.

SLIDE 6

The SEANZ agenda is simple. Ours is a question for government about their political will and desire to take action to kick start a fledgling industry that has empirical foundation in providing many advantages like: Consumer earnings (including the elderly) cost savings for consumers, growth in tertiary education, creation of employment, revenue and earnings generation for local business, export potential of intellectual property, technology and skills - all base contributors to the economy. Germany, Italy, Japan, France, Austria, Spain, Bulgaria, Czech Republic, Australia, Luxembourg, Belgium, Greece, Portugal, Israel, Netherlands, Slovenia and the USA are countries that bear witness to this as they all have flourishing micro generation industries.

This is an assessment and a business case that we encourage, we advocate and call for government to explore. We ask the Ministry of Economic Development to commission a fully funded and supported project of discovery to develop the business case for this industry sector.

SLIDE 7

There are some countries showing huge leadership in the micro generation space. Germany leads the way and has done for over 14 years.

The French Minister for Energy and the Environment announced on November 24th 2008 that the French government was launching an aggressive new program to propel the country to the forefront of solar energy generation. They are implementing a Feed In Tariff category specially for commercial buildings and businesses, to take profitable advantage of their large roof tops. Solar PV systems less than 3kW will be exempted from taxes

Closer to home. On November 24th the New South Wales government across the ditch, announced it would introduce a feed-in tariff in 2009 to encourage people to fit their homes with solar PV. Any leftover energy could be exported back to the grid, earning the homeowners a fistful of green dollars.

On November 21st, 2008 a release from the Clean Energy Council in Australia hit the media.

New modelling shows sun can shine on Australian solar power

Australia is in a strong position to develop a thriving national solar industry over the next 20 years, according to a report into the renewable energy sector released today by the Clean Energy Council.

The point is Australia is already well on the pathway with state government based incentives. The call now is for federal or central government based action with a universal country-wide incentive. So, unlike their rugby, rugby league and netball teams, at least Australia has a pathway.

SLIDE 8

The most appropriate support mechanisms to kick start the industry are Feed In Tariffs. Their implementation requires government regulation. Some governments and their power utilities don’t like such support mechanisms. Why? Because it conflicts with the contribution to the governments income. In Australia around 20% of the government’s income comes from dividends from Energy Australia. The more power utilities buy from those generating power (in a micro generation environment) the less it will earn in dividends. New Zealand has yet to explore this and there is a bigger net effect to consider called net contribution to the economy.

Today you will hear about how well constructed FIT’s can contribute to growth and development of the industry from one of our esteemed international speakers, Dr Benjamin Sovacool. You will hear about innovative micro generation case studies from Australia and NZ. You will hear about the regulatory process around electricity generation and how organisations generating and delivering the power work within that regulatory framework - in the context of micro distributed and embedded generation in the built environment. Of course it is important to understand the intricacies of the regulatory and operating processes and organisations in the industry, to work with them and seek there help and guidance to effect change. I encourage you to take this journey with us – ask questions and get interactive, to understand so we can all benefit as I look forward to the day that the micro, distributed and embedded generation industry is transformed with Government adoption of support mechanisms as it will affect the system designers, installers, integrators, technology manufacturers, local authorities, architects, developers, educators, regulation and policy makers, and all those attending this conference. Thank you.

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SEANZ08_Sovacool_Keynote_speech.pdf

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