Thursday, September 11, 2014

The Greens on energy

The Greens released their energy policy today. Some of the details we already knew: an ambitious move to home solar aimed at mirroring Australia's success. Some of it is small stuff aimed at laying the groundwork for future technology shifts, such as their electric car policy. But what I'm interested in is the core of it: a promise to move to 100% renewable electricity by 2030. As I've pointed out in relation to National's 90% by 2025 target, this is a big ask - and we're not going to get there without some serious policy (and no, leaving it to the market is not a policy). So how do the Greens propose to do it?

Sadly, the details are rather thin. The press release promises it will be achieved by an updated Energy Strategy and "a suite of complementary measures". The detailed policy document isn't much better, adding in their proposed $25/ton carbon tax and green investment bank. Both of which are good policies, but I'm not sure they're enough.

The Ministry of Energy has detailed modelling on this. Their reference scenario - which includes a carbon price of $25/ton, the same as the Greens are proposing - forecasts only 81% renewables in 2030. Even with a $100/ton carbon price, it only gets to 85%. The core problem isn't that we don't build wind and geothermal; MBIE expects both to double. Instead, the core problem is that we keep using coal and gas, and keep building new plants, even with a carbon price (and even with a high carbon price).

The core policy challenge here is the need to shut down old plants and shift new investment decisively to renewables. The Greens have some good ideas here, but they need to go further.