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2007/SOM3/MAG/WKSP/007 Session 1

Clean Energy Sector - Focus on Renewable Energy in Australian Context

Submitted by: Australia

Environmental Goods Workshop Cairns, Australia

26 June 2007

1

Clean Energy Sector- Focus on Renewable Energy in

Australian context –

APEC Environmental Goods WorkshopJune 2007Gerry Morvell

Acting First Assistant SecretaryAustralian Greenhouse Office

Climate Change is Real

2

IPCC Fourth Assessment –Key Findings and Projections

Warming of the climate system is unequivocal – theevidence lies in increased global average air and ocean temperature, melting of snow and ice, and rising sea level.90-95% confidence that anthropogenic greenhouse gas emissions caused most of the observed increase in globally averaged temperatures since mid-20th century.

Projections: Warming of around 0.2 deg C per decade over the next 20 years.Snow cover to contract, sea ice to shrink.Sea level rise to rise from 0.18 – 0.59m end of the 21st century.Extreme climate events to become more frequent.

Stern Review: Cost of Climate Change Impacts

Cost of unabated climate change equivalent to between 5 and 20 percent of consumption now and forever– Conservative of market cost, at least 5%– Adding non-market costs 11%– Taking into account more recent scientific evidence

raises estimate to 14%– Giving same weight to welfare in poor countries

further raises estimate to 20%

3

Fuel Shares of Global Total Primary Energy Supply (TPES) 2004

Renewable Energy in Global Electricity Production 2004

4

Asia-Pacific Regional Snapshot

Situation:– Diverse, dynamic and reliant on energy for

future prosperity– Renewables gaining profile as clean and secure

alternative– But, a range of barriers to uptake has limited

contribution to energy mix.– The region offers huge market potential, but

strong challenges in gaining a foothold

Electricity Generation in Region (Source: IEA 2004 Statistics published 2006)

0

500

1,000

1,500

2,000

2,500

Australia Japan SouthKorea

China India Indonesia Vietnam Philippines NewZealand

Thou

sand

s G

Wh

2004 ElectricityGeneration

2004 RenewableElectricity

5

Projected Electricity in Region in 2030 (Source: IEA Outlook 2006 Reference Case)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Australia Japan SouthKorea

China India Indonesia Vietnam Philippines NewZealand

Thou

sand

s G

Wh

2004 ElectricityGeneration

2004 RenewableElectricity

2030 ElectricityProjected

Challenges Facing RenewablesCosts Market accessResource quality & availabilitySocial/environmental impacts

6

Australia’s Climate Change Strategy

The Australian Government has invested $2.8 billion in climate change measures:

• Integrating climate change in the economy• New technology uptake: current and longer term• Partnerships with industry and other stakeholders• Weaving an effective global response

Electricity Generation in Australia 2004-05

Total Installed Capacity: 44 889 MW

Brown Coal20.9%

Gas14.3%

Oil1.4%

Hydro6.4%

W ind0.5%

Black Coal56%

Bio and other0.6%

Source Energy in Australia 2006 Aust Govt Dept Industry Tourism and Resources p45

7

Renewable Energy Facilities in Australia

Source: ABARE, Energy in Australia 2005

Asia-Pacific Partnership on Clean Development and Climate

Announced by Ministers from Australia, China, India, Japan, Republic of Korea and the US on 28 July 2005Has the potential to make a very significant contribution by bringing together, as equal partners, the major developed and developing countries in our regionSix founding partner countries encompass:

–49% of world GDP; 48% of world energy consumption; 48% of global greenhouse gas emissions; and 45% of the world’s population

8

A Practical FocusA practical partnership to develop, deploy and transfer the cleaner, more efficient technologies that the world will need to make the required deep cuts in global greenhouse gas emissionsIt is about long-term practical collaboration, not short-term, top-down targetsDoes not claim to be a quick-fix – recognises that the scale of the challenge is huge

Task Forces Chair Co-Chair

Cleaner fossil energy Australia China Renewable energy and distributed generation Korea Australia Power generation and transmission United States China Steel Japan India Aluminium Australia United States Cement Japan Coal mining United States India

Buildings and appliances. Korea United States

9

Renewable Energy and Distributed Generation Task Force

Chaired by the Republic of Korea’s Ministry of Commerce Industry and Energy (Kijune Kim)Co-chaired by Australia’s Department of the Environment and Water Resources (Gerry Morvell) – Industry reps – Rob Grant, Dave Holland, Mark Twidell, Vince Hawkesworth

Taskforce goals:– To accelerate deployment of renewable energy and distributed generation over

the next 5 years

– To close the remaining gap between the cost of renewable energy generation and conventional generation

– To identify market and policy barriers, and implement mechanisms to overcome such barriers, to enable Partners to achieve their deployment goals

Renewable Energy and Distributed Generation Focus

• Are focused on applied research, development and/or demonstration of new technologies to reduce their technical and commercial risk and increase stakeholder confidence.

• Research Development & Demonstration Projects

• Are focused on addressing policy, regulatory, attitudinal, financial, educational and other challenges to the uptake of REDG technologies.

• Market Enabling Projects• Technical Issues• Market Issues• Training and Education

• Are focused on accelerating the up-take of existing, commercial REDG systems and services into Partner Country markets.

• Deployment Projects

DescriptionProject Category

10

Renewable Energy and Distributed Generation Project Development24 projects, including 10 Australian led projects endorsed in October 2006Australian organisations are leading a number of projects including:– Deployment of ultra high efficiency solar power stations in China and the

USA– Identification of high prospect geothermal energy projects in China– Analysis of regulatory barriers to renewable energy uptake in AP6

developing countries– Quality renewable energy training programmes in India and China– Flexible biomass gasification technology for distributed power

generation

Third Task Force Meeting –San Diego

The 3rd meeting of the Renewable Energy and Distributed Generation Taskforce took place in San Diego in March 2007A focus of this meeting was financial and other barriers to technology deploymentAdditional representatives of the international finance community participatedAP6 presents significant opportunities for improving investor confidence in, and access to, clean technology projects

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Policy Issues– Tariffs – there is a need for tariff reductions or

elimination on low emission technologies and services – Intellectual property – Task Force Chair to raise with

other taskforces on need for broader approaches to dealing with enforcement of intellectual property

– Emissions trading – recognition that members are participating or considering emissions trading and there is a need for common and transparent framework to enable industry to participate effectively across national boundaries

Third Task Force Meeting Outcomes

Key Challenges & Opportunities

Address barriers to technology development and deployment

– Research and development, access to energy, intermittency, trade barriers, intellectual property.

APEC – strong message to APEC leaders and WTO on clearing the pathway for global uptake of technology options.