Cash For Clunkers Down Under

Besides the proposal to (slowly) improve the grid, Labor has also announced that it will promote a new "Cash for Clunkers" scheme to get more than 200,000 pre-1995 cars off the roads (stripping $220 million from the Solar Flagship program in order to do this, to the dismay of the solar energy sector). The scheme would provide owners of pre-1995 cars a rebate of $2,000 if they upgrade to a more fuel efficient model.

The head of the the Australian Solar Energy Society suggested the program should be funded by reducing the Fuel Tax Credits scheme, which subsidies diesel for mining companies, and costs $4.9 billion per year, instead of stripping money from solar power programs.

The Enhanced Renewable Energy Target

One brief glimpse of hope did emerge before the election campaign began in the form of the enhanced RET (renewable energy target), with the government mandating an increase requiring 20 per cent of electricity to come from renewable sources by 2020 (still a long way short of the 100% target being promoted by Melbourne University and Zero Carbon Australia).

The new the scheme will create two different market segments, the Small-scale Renewable Energy Scheme (SRES) and the Large-scale Renewable Energy Target (LRET), so that large-scale investments such as wind farms are treated differently from residential-scale renewable energy infrastructure such as solar hot water heaters and solar panels.

The LRET target will be for 41,000 GW-hr per year, with a series of intermediate annual targets being set - 10,400 GW-hr for 2011, 18,000 GW-hr by 2015 and 41,000 GW-hr by 2020 (this target remains until the scheme ends in 2030).

After the scheme was passed AGL Energy announced the fast-tracking of its plans to build the $800 million Macarthur wind farm in Victoria.

Brumby's Solar Plan For Victoria

While federal politicians have been largely ignoring cleaning up our power generation, Victorian Premier John Brumby has announced a plan mandating that five per cent of the state’s electricity come from solar power by 2020, with incentives encouraging industrial solar power stations and medium-sized commercial installations in places such as the roofs of shopping centres.

Brumby set an interim target of 500 gigawatt hours by 2014 (equating to around 285MW of installed capacity). The Climate Spectator put this in a global context, noting Spain overtook the US as the largest market for solar recently with a capacity of 430MW (Australia currently has less than 1MW of installed large-scale solar).

The plan includes a feed-in tariff, however the details are yet to be finalised (however the feed-in tariff for large-scale solar is expected to be set at a considerable discount to that of roof-top solar). Brumby estimates the additional cost on the energy bill per family at around $15 per year (without providing any details to back this estimate).

Spanish solar company Acciona quickly announced interest in participating in the scheme.

The government will also set a target of a 5-star equivalent energy rating across existing homes by 2020 and offer more rebates for solar hot water installation, and will look at establishing up to 50MW of co-generation power plants in hospitals, increase the government’s greenpower commitment to 50 per cent by 2020 from 25 per cent now, and add $100 million to the green buildings program. The program will also support to the introduction of electric vehicles into the state and will aim to reduce government car fleet emissions by 20 per cent by 2015, starting with the purchase of 2000 Camry hybrid vehicles.

While Brumby got plenty of good press following his solar initiative, he has also come under fire for another plan to replace one-quarter of Hazelwood, Australia's dirtiest power station, by 2014 (though some have argued this plan would be better value than the "cash for clunkers" program).

The criticism of the plan is based largely on its excessive cost, along with the obvious unfairness of making taxpayers pay compensation to the owner of a plant that should have been closed 5 years ago (as Crikey put it "Cash for clunkers: $1b for clapped-out, world’s worst-polluting coal generator).

Cross-posted from Peak Energy.