"Creating markets for solar PV"
Creating markets for solar PV Capitalising on Australia’s natural competitive advantage Australia has abundant solar resources and a strong track record in commercialising and developing PV technologies, but our share of the fast growing global PV market is shrinking. Ten years ago Australia had 5% of the world market. Today it is only 2%. This decline is occurring just at the time that Australia needs to be staking its claim as a significant player in this enormous emerging market. It is vitally important for the future of PV in Australia that this trend is reversed. Critical to this is government policy, which sets ambitious targets for PV use in Australia. If government were to create the right conditions it would be possible to close the gap on the world’s largest PV markets – Japan and Germany – and in the process create a successful PV industry in Australia. Outcomes: • 500 MW installed solar PV by 2010, with • Industry turnover of AUD$ 1 billion per annum • 10,000 jobs in the industry, and • 2.5 million tonnes of avoided CO2 emissions between 2002 and 2010 • Australia’s PV industry share of the global market will return to at least 5%. If these outcomes are not delivered we will find ourselves importing Australian PV technology manufactured elsewhere. We will not have a viable domestic industry when PV becomes a significant energy source. The main driver in the domestic renewables market is the Mandated Renewable Energy Target (MRET). The solar PV industry supports the greenpower industry and major green groups in calling for an increase in MRET to 10% by 2010.. Installing 500 MW of solar PV will stretch all players in the industry value chain but will ensure that Australia is well positioned to meet growing global demand for PV. The necessary growth would need a local manufacturing industry providing about 120 MW per year, about 6 times greater than currently, and investment of about AUD$100 million, three or more cell manufacturers, and over 10,000 industry jobs. The three principal elements of an appropriate strategy are: • Panels on roofs - creating the sustainable city • Powering rural communities, and • Exporting clean energy February 2002 Page 1 BP Solar Pty Ltd 2Australia Ave Homebush Bay NSW 2127 Australia ABN: 52 094 827 531 1. Panels on roofs - creating the sustainable city • 100,000 roof-top residential systems by 2010 (150 MW) • 1,000 commercial buildings by 2010 (100 MW) Residential and commercial grid-connect markets have driven rapid growth in Japan, Europe and some US States. In Australia these remain large, untapped markets – markets where PV can become the beacon in Australia’s transition to a sustainable energy future. The global level of support needed for a rapid development of grid-connected solar power for residential and commercial buildings would be in the order of $380 million over the period to 2010. A sustainable solution is to fund it through a revised Mandated Renewable Energy Target (MRET) legislation. Whilst such a scheme is not fully established, there is a need to maintain and expand the existing Renewables investment Programs (RIP) in place, especially the Photovoltaic Rebate program (PVRP), which is due to run out of committed funds mid 2003 in its present form. 2. Powering rural communities • Displace half of all diesel generation by 2010 (250 MW) Creating PV ‘micro-grids’ or ‘mini-grids’ will be a key development. These systems, about 50- 100MW in size, use PV and diesel technology to supply small towns and settlements that are not grid connected, particularly for Aboriginal communities. Displacing diesel fuel in electricity generation is the next major market for which PV will be economically viable in the near future. The current Remote Renewable Power Generation Program (RRPGP) must be amended to enable this. Further, the program will need to be extended through to 2010, requiring an additional $220 million above already committed funds, after 2008. Likewise, most of its funding could come from an appropriately revised MRET legislation. 3. Exporting clean energy • $0.5 billion of annual clean solar energy exports by 2010 (100 MW) The global market for clean, low carbon energy is rapidly expanding – by 2010 the installed PV capacity in Asia will be about 1,000 MW and the Asian market will be worth about US$2 billion. The Australian PV industry can provide clean energy systems (not just components) for export to this market. For example the “Type 2 Partnerships” designed at WSSD in Johannesburg promote Governments and business working together to deliver development opportunities. With Government support the PV industry is well placed to provide sustainable energy systems that power rural communities in countries high on Australia’s priority – systems that address basic needs like health and education, and enhance opportunities for micro-enterprise. Providing sustainable energy to meet development needs is an objective of Australia’s overseas assistance. In the past the PV industry has delivered clean energy solutions to AusAid funded projects in the Asian region. The PV industry would like to re-gain these project opportunities, through Government support for tying funding to the use of Australian PV systems. For further information please contact Carmen Sanchez on +61 3 9268 4858. February 2002 Page 2 BP Solar Pty Ltd 2Australia Ave Homebush Bay NSW 2127 Australia ABN: 52 094 827 531