Renewable Energy: Knowing What We Are Getting
Report 12 - November 2007
Background
In 2005-06, approximately 26 400 gigawatt hours of electricity
was generated and distributed in Western Australia. Fifty-five per cent
of this – around 14 400 gigawatt hours – was generated and
distributed on the South West Interconnected System (the ‘South
West Grid’) which supplies electricity to household and commercial
users in the heavily populated south west corner of the State.
Currently, electricity from renewable sources makes up a
relatively small proportion of the total electricity generated on the
South West Grid, new targets aim to increase this proportion. Research
into the marketing of renewable energy tells us that consumer confidence
in ‘getting what you pay for’ and trust in providers of renewable
energy are important factors in its growth and acceptance.
Our examination focused on determining if Western Australians
can be confident that renewable energy bought and sold by State Government
agencies is electricity from renewable sources and, is properly accounted
for. We also examined:
- whether the GreenPower program is increasing the supply of renewable
energy in Western Australia
- the basis of the State Government’s renewable energy targets,
and whether they are realistic, measurable, and auditable.
We examined the State Government’s agencies and businesses
involved in buying and selling renewable energy.
What the examination found…
The public can have confidence that certified renewable
energy, that is energy that is certified with Renewable Energy Certificates
through the Mandatory Renewable Energy Target and GreenPower programs,
comes from renewable sources.
- Since 2001-02, electricity generated by accredited renewable sources
on the South West Grid has increased from one per cent of total energy
generated to five per cent at June 2007. The mandatory target and GreenPower
programs have contributed to this increase.
- The Western Australian Government is on track to meet its target for
six per cent of all energy on the South West Grid to be from renewable
sources by 2010. The 2020 target for 15 per cent of all energy on the
South West Grid to be from renewable sources would also be met if new
renewable energy generating plants under construction or on the drawing
board proceed.
- Sales of GreenPower to both commercial and residential customers are
disproportionately lower than in other states. For instance, only one
in every 164 Western Australian households was buying GreenPower at
30 June 2007, compared with rates of between one in nine and one in
17 in other states. The Office of Energy and Synergy advise, and independent
research indicates, that the low sales are likely to be due to lack
of marketing activity and consequent lack of awareness and confusion
about GreenPower products on the part of consumers.
- Western Australian generators are likely to be able to produce enough
GreenPower in 2010 to meet the Government’s intention to purchase
20 per cent of its requirements from renewable energy sources. While
some retailers may need to buy from interstate to meet their own mandatory
target, Office of Energy information indicates that the state as a whole
should generate enough renewable energy to enable the Government to
meet its purchasing target.
- Large electricity consumers may use individual contracts to buy electricity
equivalent to the output of a particular generator. In the case of the
Kwinana Desalination Plant, the Water Corporation is buying electricity
from Synergy equivalent to 69 per cent of the output of the Emu Downs
Wind Farm. Renewable Energy Certificates are not part of this transaction.
What the examination recommended…
Government agencies should ensure that they:
- educate consumers about renewable energy
- are transparent about what people are paying for
- report regularly against their renewable energy targets.
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