Melbourne
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Good morning
Ladies and Gentlemen and parliamentary colleagues, thank you for the invitation to be here today for the launch of the Clean Energy Council’s Large-Scale Solar Policy Roadmap.
In March last year I launched Australia’s first ever comprehensive energy resource assessment, and this showed categorically what many of us had suspected – that Australia has some of the world’s best solar resources.
This in turn means that Australia has great potential for electricity generation from large-scale solar projects.
This roadmap is very much about realising that potential and I welcome the contribution this work makes to the energy debate.
This is of course a complex debate and one that has been central to Australia’s policy agenda in recent times.
It is a debate that the Clean Energy Council, as Australia's peak industry association representing clean energy companies, has been very much engaged in and I thank you and all those who brought their expertise and insight to this project.
As a roadmap, this document sets out potential next steps, putting forward a number of recommendations and highlighting a range of key issues.
The policy framework
At its heart, what this roadmap calls for is support for the development of the solar industry.
It identifies policy certainty as a central requirement for achieving this.
With the release in July of the carbon price package, alongside the existing Renewable Energy Target (RET), I believe that the Australian Government is providing both certainty and stability for the solar industry specifically, and the renewable and clean energy technology sector generally.
The Government appreciates the enormity of the investment and transformation challenges our energy sector faces and that is why we have put forward a robust and comprehensive set of measures.
Our approach is market-based, complemented by direct government funding to fill market gaps.
The expanded RET is already driving investment in the renewable energy sector.
It creates a guaranteed market for electricity generation from renewable energy sources.
A price on carbon not only strengthens the signal to investors, but will also help renewable energy become more cost competitive with other energy sources.
Together they provide long-term policy certainty.
Together they will benefit the solar industry, and I acknowledge your support for this policy.
But as you have heard me say many times before, the Government is not about picking winners.
We are about driving transformation in our energy sector in the most cost-effective way.
That’s why we are pursuing a market based approach.
Solar’s share of the energy market will ultimately depend on its competitiveness.
Now that isn’t to say that Government doesn’t have a role in helping solar compete - we do, and we are playing that role.
The challenge for policy makers is finding the right balance of shared risks between governments and industry – between what governments are prepared to take on and what ‘skin in the game’ industry should be willing to invest.
Getting this balance right, will provide the right incentives and will ensure the most efficient development of the sector.
Government support for solar
As recognised in the Council’s roadmap, upfront capital costs and policy uncertainty are barriers to investment.
The $10 billion Clean Energy Finance Corporation will provide a new avenue the solar industry can tap into to assist in overcoming this.
The Australian Renewable Energy Agency (ARENA) builds on the support we have already provided, particularly for large scale solar through the Solar Flagships program.
The experience gained from round one Solar Flagships projects will have flow on benefits for the broader industry.
Over $700 million remains uncommitted from the Solar Flagships program that will now form part of ARENA.
A further $5 million has been committed to Geoscience Australia (GA) to improve the quality of solar resource data in Australia – something I note you have also touched on in the roadmap.
GA’s satellite solar radiation maps and data are publically available – and GA is building on this data with the Bureau of Meteorology to improve its accuracy.
Once available, this data will assist the solar industry to plan with confidence where to build its next solar power station.
Additionally, the Australian Solar Institute is working closely with my department and others to investigate solar forecasting – an issue I recall being raised at the July Solar Roundtable hosted by my department.
This work will support the two Solar Flagship projects and it will also benefit the whole solar industry.
As you know the Solar Flagships program was developed following an independent examination of the best way to support large scale solar.
In terms of value for money – and let’s not forget that taxpayers are the ones who are contributing significantly to these projects – independent analysis from the Boston Consulting Group shows that the Solar Flagships Program provides better returns to taxpayers than feed-in-tariffs.
But that isn’t to say the way we support the industry can’t be fine-tuned and improved which is why my department will begin a review of Round 1 of Solar Flagships in the first half of next year.
This review will consider all aspects of the program and will capture the lessons learnt from Round 1.
Input from stakeholders will be an important part of that process.
The review will inform the Government and the ARENA Board on future funding options for large-scale solar.
ARENA will oversee a range of existing solar projects as well as developing a funding strategy on how the unallocated funding can best support renewable energy development in Australia.
Ultimately, funding decisions for the uncommitted Solar Flagships funds will be a matter for the independent ARENA board.
ARENA will also incorporate the Australian Solar Institute, which has, and I think you would agree, been extremely successful.
Future work
I know certainty is a real issue in the energy sector.
Not just in terms of solar, but for all electricity generation technologies.
The Government’s carbon price package – including the new institutions of the CEFC and ARENA – are designed to help provide the certainty of support I know the industry is seeking.
Looking beyond these measures, the Energy White Paper will map out the Government’s vision for the energy sector in the longer term, out to 2030 and beyond.
Renewable energy, including solar, will undoubtedly play a key part in this longer term vision.
It is intended that the draft white paper will be released later this year, followed by the final white paper next year.
Conclusion
Ladies and gentlemen, the renewable energy industry is a large, diverse and growing sector of the economy.
I congratulate you on your work to promote large-scale solar as part of this growth, including through this roadmap.
Thank you