There is a global clean energy transformation happening right now. 2015 was the biggest year ever for global clean energy investment, reaching a record $329 billion USD, with growth primarily being driven by the world’s two largest economies, the United States and China.
The conversation around clean energy has grown from one started out of concern for the impacts the energy sector is having on our environment, to also considering what is in the best, long-term interest of our economy. In a fundamental sense, the conversation actually hasn’t changed at all. These are two different ways of answering the same question: what is in the best interest of society as a whole?
One benefit of having the clean energy conversation pivot to a more economic tone is that it has drawn new voices into the clean energy and climate movements, building increasingly compelling arguments for action.
In a recent research report, the International Renewable Energy Agency (IRENA) projected that doubling the world’s use of renewables by 2030, seeing renewable energy supplying half of the world’s energy, would see the world economy better off by $1.3 trillion USD annually, compared to maintaining the status quo.
The report also found that Australia would be one of the major beneficiaries of such a shift. The small impacts of reduced fossil fuel exports are more than offset by the opportunities created in the clean energy sector and reduced risk of the impacts of global warming.
Some of these benefits were quantified by the International Monetary Fund (IMF). Last year, the IMF estimated global fossil fuel subsidises were worth $5.3 trillion annually, more than three times the size of the Australian economy. The bulk of these subsidies take the form of what are called “negative externalities”, or the impacts on health and wellbeing from pollution which fossil fuel producers bear no responsibility or cost for.
The risk of fossil fuels also extends to the stock market. 2015 was a particularly poor year for fossil fuel investments. An index of fossil-free investments, created as a partnership between Thomson Reuters and Future Super showed fossil-free investments achieved more than double the returns compared to the wider share market.
In the last 12 months, shares in major Australian fossil fuel companies have been hammered. Whitehaven Coal has lost 67% of its value. Santos lost 64%, BHP Billiton is down 48%, Rio Tinto 30%, Woodside Petroleum down 26% and Oil Search has lost 23%.
While this is all very depressing, it is important to remember the positives. The opportunities that clean energy provides for economic reform are so much more fundamental than stronger economic growth and better performing investments.
Turn it around
So, what is happening in Bungendore that is so revolutionary?
Canberra-based start-up Reposit Power installed its first example of a combined solar power and battery storage system that is integrated into the National Electricity Market. The system produces and stores enough electricity for a family’s needs and, when demand for electricity in the market is high, the system feeds electricity back into the grid to take advantage of high prices.
The system facilitates the trading of clean energy amongst users, while also coordinating the collection and storage of clean energy for use 24 hours a day, directly addressing a common criticism of clean energy.
Currently just a few these systems have been installed in homes around the Canberra region. Imagine the potential that technologies like this could have if they became standard across Australian homes.
The electricity market would go from being a simple one-way transaction, where large energy companies and a handful of electricity retailers sell electricity to you, to being an actual market place, where homes and businesses buy and sell energy based on need and ability.
The agreement reached at the United Nations climate talks held in Paris last November very much placed responsibility for meeting the agreed goal of limiting global warming to well below 1.5 degrees squarely on national governments.
The Greens undoubtedly will fight hard to ensure Australia lives up to this responsibility, and recently outlined our vision for 90% renewables by 2030 in the RenewAustralia policy package. What is encouraging is that even in times when we have a Government that does its best to impede the transition away from fossil fuels, an ever-growing economic imperative and an increasingly equipped public will continue to drive this change.
Personally, I think it is exciting to think that, while they may not be coming from Parliament House, the tools to empower homes and businesses to take control of their energy supply through cleaner and cheaper sources, are being developed right here in Canberra.
Michael Mazengarb is a clean energy market analyst, and has worked for the Government and non-Government organisations. Michael will represent the ACT Greens as the lead candidate for Brindabella at the 2016 ACT election.
Image by Elena Elisseeva.