Falling Short – F.I.T. in renewable power

A desire to improve the competitiveness of Renewable Energy in Australia’s power mix is problematic and it is not necessarily technical limitations that hamper the project or is it financial limitations despite bank risk concerns. Especially if the later is supported by the Government bringing forward $160 million in Clean Technology Investment Program (CTIP) funding to 2014-15 to increase manufacturing investment and boost productivity and competitiveness – The budgets key message that CTIP program demand is strong and growing, and there is no change to the funding commitment.  It also is possible the coalition could maintain the $1 billion commitment to the investment programs, albeit it may be called something else for branding purposes.

Co2Land org argues it is not sufficient to be experience in, or have an understanding of the challenges in the design or deployment of renewable energy solutions. That is referring to only the infrastructure, energy output, utility area of responsibility, power capability, transmission and distribution capacity, or even storage technology as the solution set.

The more dangerous issue is the means that an uncooperative energy utility can muster a political wedge and creates sufficient doubt of the effectiveness of the program that will lead to a fall-out with the community. Recently in Australia Co2Land org has been given information that a bitter war is engaged between parties over such a Queensland power line duplication proposal and it all seems so unnecessary. As an observation there is room for both sides to move on this one. However, the agenda may be more complex and looking further afield Canada has some lessons we could learn from over the growth of renewables and why utilities might be so sensitive to the growth of such. It could be our problems in Australia are similar to the following as the Pike Research report that says energy is becoming increasingly democratized and the role of utilities is changing, from producing power and supply markets to purchasing it from distributed sources. We also know in Queensland the State Government has a large ownership stake in generation and supply – albeit they are not alone from the other states and it all gets down to variation of the model as opposed to opposition of the models of operation. Regardless each has ample opportunity to hamper success of ‘buy local’ feed-in into the grid system as the rules stand.

Looking further to the problems of Canada and the utopian belief that all would embrace the new world, it is reported by www.energymanagertoday.com, on 21 May 2013:

“Ontario has fallen short of its goal of creating 50,000 jobs and 5 gigawatts of renewable energy power with its ‘buy local’ feed-in tariff program, despite gathering early momentum by generating 31,000 jobs and turning one in 7 farmers into energy producers, says a report by the Institute of Local Self-Reliance.

Hydro One, the province’s largest utility, has been a major roadblock to progress says ILSR report author John Farrell, since it set a limit of sourcing just 7 percent of its energy from distributed renewable sources, compared with 15 percent for most US utilities. In US states where the cost of power is high, like Hawaii and California, utilities have upped the limits even further, at 25 and 50 percent respectively.

Farrell says Hydro One did not prepare to accommodate the boom in distributed power from the FIT program and missed deadlines to link up to new sources of power. As a result, despite overwhelming demand for FIT and contracts being signed for most of the 5 gigawatts, only 10 percent of the projects are producing electricity now.

Because of the demand for FIT, Ontario will actually be able to shut down all its coal-fired plants next year, and meet most of its 2030 renewable energy goals 12 years early – but its notable success has come at a price, since unprepared utilities were not able to bring the contracted energy on line.

The slow development led to political backlash that nearly toppled the ruling Liberal Party in the 2011 elections. It did lose its majority, which Farrell says jeopardized support for FIT. The Great Recession also stymied progress.

Since then, Ontario has reviewed the FIT program and revised its rules last year, doubling its focus on local ownership and participation. Farrell believes the move, which he says should have been adopted two years ago, will reduce political angst and local opposition and increase return on investments.

Farrell suggests that the Ontario Power Authority needs to streamline its process for developing renewable power with existing contracts and push utilities to get better at determining grid capacity. It should also review whether utility-scale mega projects make sense, given the difficulties in getting it to market. With these changes, “the FIT program may still live up to much of its early promise” he says.”

Sometimes you have ask – why do we ignore the obvious in Power Play? I answer is it is the nature of things to only see our side as a team play, and there is no I in team. ‘I’ referring to the society as a collective, and it has no advantage to be a collective outcome.

 

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