Queensland Labor is flaunting its green credentials, citing a renewable energy boom over its two terms in state government.
And in Premier Annastacia Palaszczuk’s ‘State of the State’ address to a business function last week, she announced plans to take this to the next level, revealing three new renewable energy corridors across Queensland’s north, centre and south-west.
“I don’t want to just deliver renewable energy zones — I want to deliver industrial zones and hydrogen hubs — because that means more secure full-time manufacturing jobs,” Ms Palaszczuk said.
But energy analyst and Green Energy Markets director Tristan Edis said the amount of money pledged to this new initiative — $145 million — was just “a drop in the ocean”.
On current trends, the Queensland Government is likely to fall well short of its stated target of achieving 50 per cent renewable energy for electricity output by 2030.
That target was first announced back in 2016 as a way of attracting investment in the absence of any greenhouse gas emission target policy from the Federal Government.
The then-environment minister Steven Miles said the target “would create the jobs of the future and continue to boost investment, act on climate change, and deliver value and system security for both customers and government”.
There has been considerable progress over the past five years, with 39 additional renewable energy projects either in operation or under construction.
The Queensland Government has estimated this represents a $6.6 billion investment, involving around 5,700 construction jobs.
This has meant renewables have surged from an estimated 7.2 per cent of Queensland’s power consumption in 2015 to around 20 per cent today, but these figures do not tell the full story.
Solar and coal-generated power compete
Firstly, Queensland has come off a very low base — traditionally a laggard in a sector in which it has considerable natural advantages.
Clean Energy Council director of energy transformation Lillian Patterson said Queensland had “good wind and solar resources and it is surprising that they have not taken advantage of that”.
Despite the progress in recent years — Queensland was still ranked as one of the least-renewable-friendly states.
Secondly — an inconvenient fact that had not rated a mention in the State Government’s official economic recovery plan — investment in Queensland renewables last year virtually collapsed.
The reasons for this are complex, but they include a lack of long-term Federal Government policy, technical problems with transmission systems in north Queensland, and a new law that restricted some solar construction work to licensed electricians.
Another major disincentive has been depressed power prices in the middle of the day — in other words, when the sun is shining brightest there is too much solar and coal-generated power competing on the same market.
Mr Edis concedes it was different for wind farms, which had a more regular output during the day, but the fundamental problem was that there were no long-term federal incentives for zero-emission power, with the Coalition Government’s Large Scale Renewable Energy Target Scheme (LRET) being phased out between now and 2030.
“The Queensland Government can’t just rely on the trend to keep on going,” Mr Edis said.
Coal production remains a state mainstay
Although Ms Palaszczuk’s announcement of three renewable energy corridors was generally welcomed by the sector as a step in the right direction, this alone would not make the target of 50 per cent renewables by 2030 a reality.
One way the Queensland Government could attract new investment is to announce a phasing out of coal-generated power — an option neither major party will find politically acceptable.
Queensland’s coal-fired power stations are relatively young by national standards, and coal production is one of the mainstays of the state economy.
Another approach is for the government-owned renewable energy company CleanCo to order more renewable projects, which would probably require the Government to underwrite any potential losses.
Mr Edis said he thought this was a realistic approach.
“If the Queensland Government was to contract new solar and wind farms at about $45 per megawatt-hour, while this would be a bit more expensive than current wholesale ASX futures contract prices of $39.36, it would still be about a third cheaper than the wholesale energy costs Queenslanders had been paying 12 months ago,” Mr Edis said.
No simple solutions
A joint report this month by the Australian Conservation Foundation and Green Energy Markets estimated Queensland was currently on track to achieve 35 per cent of renewables by 2025 — most of this growth is due to two very large projects — the MacIntyre Wind Farm, south-west of Warwick, and the Western Downs Solar Farm, south of Chinchilla.
There is little on offer in the second half of this decade, apart from the growth in solar power from rooftops.
So by 2030 — the renewable figure will be a bit under 38 per cent — still making Queensland one of the worst-performing states in the Commonwealth.
There are no simple solutions.
The Palaszczuk Government may well blame Canberra for lack of policy direction, but the Federal Government was not the one setting a renewable energy target and arguing it was achievable, while maintaining support for Queensland coal.