Melbourne Renewable Energy Project is a pioneering Australian project which is gathering momentum with a new tender for renewable energy advertised recently across the country. It has successfully united a group of large-scale energy consumers, inspiring them to invest in a long-term electricity contract spanning at least 10 years and which is about creating the jobs of the future, supporting innovation while diversifying Melbourne’s energy supply
REM spoke to Councillor Arron Wood, Chair of Melbourne’s Environment Portfolio, to find out more.
How would you describe Australian energy policy under Tony Abbott?
I think it is safe to say that Tony Abbott’s climate policy was not his strong point, there was a real lack of action on climate change and indeed the world’s first working carbon price was removed. We were the first country to remove a working carbon price. Alongside that, the Renewable Energy Target (RET) was also under sustained review, which would have essentially put the renewable energy industry into stasis. Literally, investment dried up almost overnight. So we’re really coming off a couple of years of really tough times for climate action, for the renewable energy industry and for sustainability right across the board I would say.
Have things improved since then?
They have to a degree, in that we have signed off on the RET. It was naturally lowered in terms of that it was going to overshoot the target because of the rapid uptake in the renewable energy sector. I guess it was lowered to a true target of the original intent, but at least it was signed off. We signed on to the Paris COP 21 agreement, which I attended, so that was a positive step. That said, there is a need for the current Federal Government to really demonstrate that they are really serious about tackling climate change and indeed about firing up the renewable energy sector again. This project was originally initiated under Tony Abbott’s time because there was a growing frustration with the lack of direction and support at a Federal Government level. We think that is going to change. The global momentum is really shifting and we think this project, the Melbourne Renewable Energy Project, will be seen in a really positive light once we get tenders back on 23rd May.
What’s happening with climate change in Australia at the moment?
It has been quite clear that the impact of climate change is already hugely evident, particularly in the last 20 to 30 years. We’ve just had a horrific bleaching of the Great Barrier Reef, with 93 percent of the reef having experienced some sort of coral bleaching. We’re seeing reduced rainfall, longer heatwaves, much drier conditions at times when we usually get rain. So we’re actually seeing all of the issues that the models have been predicting and the worrying thing is, in terms of the impacts, is that they are showing the sort of impacts that we thought was going to happen in 2030.
Tell me a bit more about the Melbourne Renewable Energy Project
We have got a target of zero net emissions by 2020. We are the central city so 33 square kilometres in the centre of the city which takes in the central business district, so that target of zero emissions was set in 2002 and we have a huge array of programmes in trying to meet that target, commercial buildings, residential energy efficiency and stationary energy. Anything you can think of in terms of our emissions profile, we’re targeting. We’re also working with industry, with residents, with all of the other players in the city that are part of that emissions profile. One of the real sticking points is that at the moment Victoria is still largely powered by brown coal. Only about 12 percent of our energy mix is renewable. So if we’re serious about meeting our emissions target by 2020, we’re going to have to change that energy mix. A couple of years ago when we revised the zero emissions strategy for the first time, we actually included a city renewable energy target of 25 percent of our energy coming from renewable energy sources by 2018. So we set our own ambitious target for municipality and that is firmly about demonstrating a new model, a new bulk purchasing model that can actually serve to change that energy mix.
How popular is clean energy among the public?
We actually have the highest penetration of rooftop solar in the world, over a million households in Australia have rooftop solar so the everyday person in Australia gets the idea that clean energy is a really good thing. It’s just taking a lot longer for the Federal Government, and for some sectors of our economy, to understand that clean energy is also a good thing. That momentum is starting to shift. We have had quite a number of large-scale renewable energy projects come to fruition that were started prior to the tougher years under former PM Tony Abbott. I think that momentum globally is perhaps starting to wash over domestic policy which has been inhibiting stronger action in the clean energy space.
I think also that what we’re seeing is levels of government like ourselves [really starting to move on this], like the South Australia government, which is now up to 42 percent renewable energy for that state, and also for the Australian Capital Territory (ACT) which has a 90 percent RET by 2025, and they are well on their way to achieving that. In Victoria, we’re just about to announce our own RET, the Victorian Renewable Energy Target (VRET), which will hopefully sit somewhere alongside the very ambitious target of South Australia, which has got a 50 percent target, and indeed the hugely ambitious target of 90 percent in the ACT.
It’s been an unashamedly tough time for the clean energy sector over the last couple of years in particular, but prior to that we had a really booming industry, particularly in wind, but I also think that we’re going to see the pleasing thing of large-scale solar starting to take off.
What are the most promising renewable energy technologies in Australia in your view?
Wind is quite amazing in terms of its reaching parity with some of our fossil fuel projects and I guess the other thing about both wind and solar is that, we know the fossil fuel infrastructure in Australia is going to have to be renewed anyway, so newly built fossil fuel just doesn’t stack up with new renewable energy. I think that’s just an economic reality, so when we talk about refreshing our national electricity market and renewing our infrastructure, renewable energy is a clear winner in terms of new generation.
In the absence of a carbon price it’s a little bit harder to compete with existing brown coal. That’s why projects like the Melbourne Renewable Energy Project is important, because what you’re seeing is various levels of sub-national government and local government, and we have a good mix of corporate institutions, educational institutions, that have corporate social responsibility, they want to change the energy mix. When you look at the list of people involved in this project in particular, there is everything from banks to zoos in Victoria, to local government, to our national postal service, to a big data centre. We’re all saying that we believe clean energy is the future and that it is also the present and that we’re prepared to put our money where our mouths are and see what the market comes back to us with.
Which technologies in particular does Melbourne hope to draw on for clean energy?
For this project in particular it is technology-agnostic in that we’re not specifying a particular technology but it does exclude biomass or wood chip burning because we want to go with an emissions-free technology, but other than that it is really open to the market to come back to us. Price is an issue, it is part of the weighting, but other things, co-benefits, links to educational institutions, benefits to the community, these are all parts of the tender that has just gone out last week. Now it’s the time for the tender process to run, as they do. We had real interest in the Request For Information process that we ran last year. We’re expecting it to be a really competitive tender. When you look at some of the other tenders that have been run recently for renewable energy, such as the ACT tender and some of those in South Australia, what we know through our studies is that there are lots of shovel-ready permits out there with land set aside but needing a power purchase agreement, and that’s why this project came into being.
We wanted to identify a role for local government, and that role is bringing large-scale consumers of electricity together and then going to market and offering that aggregated demand. We found through that RFI process that we needed 100 GW per year as a minimum threshold to make the projects viable. We’ve gone to market with a 110 gigawatt hours (GWh) of energy for the year, which is pretty huge, it’s 250,000 solar panels or 15 wind turbines – enough to power 28,000 homes.
It’s not about solving the entire issue, but what it is about is demonstrating a new model of large-scale consumers coming together and direct purchasing renewable energy from the market. This will be new generation capacity. It is not buying certificates, it is not part of the RET itself, it’s actually on top of that because it is firmly about changing the energy mix. Probably the most exciting thing about this project is its replication potential. We’re already working on producing an ‘off-the-shelf’ version of a model that can be replicated by other local governments and large businesses. Industry can then pick up and run with this. We’ve already had international attention from the C40 Network. Executive Director Mark Watts was briefed on the project and was extremely excited by its replication potential. When you consider that the C40 Network has 25 percent of GDP in terms of cities that are in its network, that’s where I think this project is going to be truly exciting.
Where do you think, or where do you hope things will be in ten years’ time?
I’ve been involved in the environment industry for a long time, it’s coming up on 17 years of my life’s work, so I am chair of the portfolio here at City of Melbourne but I have also got a much stronger interest in a much more sustainable future. One of the amazing things about Australia, and it’s been said time and time again, is that we have got so much to lose from climate change. Unfortunately, we’re already seeing the impacts there. We are one of the most ‘at risk’ nations in terms of our climate being quite a harsh climate anyway, and if you exacerbate that too much then it becomes pretty tough, but we’ve also got a huge opportunity because the one thing that we have more of than coal in the world is sunshine. I’ve visited the CSIRO hybrid energy systems research centre and the research that’s going on there in turning solar into liquid fuels is really, really exciting, so in ten years’ time I think we’re going to see a huge shift in the energy market in Australia. I think the predictions of how much renewable energy will be part of the overall energy mix is well underestimated because with that Paris agreement we have 195 nations pledging their commitment and so our commitment to renewable energy is going to have to hugely accelerate. In ten years’ time I think these conversations we’re having will just be the way you do business and that’s my hope.
Is there anything else you would particularly like to mention?
I grew up in Victoria, six or seven hours outside of Melbourne, and for us renewable energy isn’t just about saving the world, it’s actually about saving regional towns across Australia that suffer during drought. One thing you have when you have drought is lots of sun. Renewable energy is really seen as a diversification of income for a lot of those regional centres. Whatever the project is, its going to generate about 140 jobs during construction and ongoing jobs in operations, maybe not as much as in construction but certainly in ongoing operations such as management. We also see the capital city driving investment with renewable energy as the entry point, so yes it’s good for the environment but we see this as a massively intelligent business decision and the latest part is about cities building up resilience, things like resilience of your grid and the ability to generate energy during heatwaves. All these sorts of things point to a really diversified energy mix and I think renewables will play an increasing role.
Melbourn Renewable Energy Project
Led by the City of Melbourne, the group comprises Australia Post, NAB, the University of Melbourne, RMIT, NEXTDC, Zoos Victoria, the City of Port Phillip, Moreland City Council, the City of Yarra, Citywide, Melbourne Convention and Exhibition Centre and Bank Australia.
About Councillor Arron Wood, City of Melbourne
Arron Wood is a sustainable business expert with a strong interest in the environment. He runs the environmental education program, Kids Teaching Kids, which has seen more than 100,000 students participating over the past 16 years and has won the 2010 Banksia People’s Choice Award and is Chair of Melbourne’s Environment portfolio and Deputy Chair of the city’s Economic Development portfolio. Cllr Wood has also received the Centenary Medal for outstanding contribution to conservation and the environment, awarded by the Governor-General, and completed a Churchill Fellowship to New York and Geneva with the United Nations. He was nominated as the 2007 Prime Minister’s Environmentalist of the Year and also won the prestigious Melbourne Award for Contribution to the Environment. He has also been selected to complete Al Gore’s Climate Change Leadership Programme.
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