Australia behind on renewable energy

SHANE MCLEOD: There was a record level of global investment in renewable energy last year.
China alone accounted for more than one fifth of the total.

It follows news that coal is on course for the weakest quarter of the year as China boosts the use of hydro-electric power. Some commentators say it’s time for Australia to get on board.

David Taylor reports.

DAVID TAYLOR: By early this year, over 100 countries around the world had policies or targets in place to support green energy – more than half in the developing world.

That’s according to the Global Trends in Renewable Energy Investment 2011 report.

Countries are starting to realise that sources of energy like coal, are not such a safe investment. In fact at this point coal is looking quite shaky.

JONATHAN BARRATT: The big concern obviously is Japan who is a major consumer of coal and obviously the concerns there we’ve had with this tsunami, our prices are a little bit soft because the steel mills really aren’t back into full capacity. So if they are not buying the coal, then prices naturally will tend to head to the lower end of the range.

DAVID TAYLOR: That’s Jonathan Barratt from Commodity Broking Services. He’s reacted positively to news this morning that China is taking advantage of increased rainfall to boost hydropower production.

JONATHAN BARRATT: So this is one step for them to try and lead the globe in actually reducing their carbon emissions so I think it is quite positive from that side of the fence.

DAVID TAYLOR: Jonathan Barratt says China has been forced to look for alternative sources of energy given their heavy reliance on resources like coal.

JONATHAN BARRATT: Well, I think it is just a prudential thing that China looks to do. Essentially they look to hedge a lot of their primary inputs and I think this is a step because they do have ample thermal and when you look at the technology out there these days, it is a very cheap form of resource to use.

DAVID TAYLOR: But AMP Capital Investors’ head of Investment Strategy, Dr Shane Oliver, says China’s not yet in a position to move away from coal.

SHANE OLIVER: I don’t know that Chinese rivers and dams necessarily have all the capacity to satisfy China’s electricity needs going forward via hydro alone so I think coal demand is still going to be pretty strong.

DAVID TAYLOR: But Australia’s even further behind. According to Dr Oliver we should be well in front when it comes to electricity powered by solar and wind.

SHANE OLIVER: The unfortunate reality is that because Australia has delayed investment over the years in alternative energy sources such as solar and wind, other countries have the advantage so this has kept our energy prices artificially lower over the recent years but the reality is that we have been left behind to some degree.

DAVID TAYLOR: He says the demand’s simply not there.

SHANE OLIVER: I mean Australia, if you go back 10, 15 years ago was at the forefront of solar technology but now we’ve slipped behind simply because the demand hasn’t been there because we haven’t been afforded a chance of adopting it.

DAVID TAYLOR: Jonathan Barratt agrees.

JONATHAN BARRATT: Well, look at the moment no, because at the moment we look when we are feeling for a price. Obviously $23 is the indicator and it will be very interesting to see what happens on Sunday because I think there is more the devil is in the detail.

I do feel, I guess concerned that the fact that the Government hasn’t seen this or forecast this sort of concern suggests to me that the Government is a bit behind the eight-ball.

DAVID TAYLOR: He’s says its Australian taxpayers that will pay the price for the Government’s indecision.

JONATHAN BARRATT: I mean, you know, obviously their emissions or the majority of the emissions are the result of burning coal to feed obviously electricity production and seeing that we have other natural resources such as hydro, and hydro and obviously our natural gas, I feel that the Government should have acted a long time ago.

It is as if now they are slugging the public, slugging the public an additional tax because they haven’t provided that infrastructure early on in the piece, say 15 to 20 years ago.