1. The ACT’s 100% renewable energy target and Australia’s changing generation mix
Jon Sibley
Director, Energy and Waste Policy
Environment and Planning Directorate
ACT Government
Contents
Energy efficiency
Renewable energy
Distributed battery storage
Carbon neutral government operations
Zero-carbon public and private transport

2. Australian Capital Territory Canberra: Australia’s Capital
Population: 400,000
Advanced knowledge economy
Ranked #1 in the world in the world for climate change targets
40% reduction from 1990 level by 2020
Carbon neutrality by 2050
100% renewable energy by 2020

3. SECTION 1: National policy context

4. The National Electricity Market (NEM)
National market established 1998
40,000 km of transmission, 9 million customers
Five interconnected states/price regions
50,000GW, dominated by coal and gas:
SOUTH AUSTRALIA
TASMANIA
VICTORA
NEW SOUTH WALES
QUEENSLAND
Fuel sources ( )

5. Market structure $ LGC market National renewable energy target
Electricity demand forecast
Contract market
Spot market
Retail
Generation $
Customer
Embedded generators
Distribution
Transmission

6. Victorian spot market prices (Example: 17 July – 23 July 2016)

7. Survey result: Bankability of future revenues
Significant policy and pricing uncertainty in Australia
Lack of long term off-take deals
Merchant risk greatly increases the costs of finance
National 2020 target unlikely to be met
Not bankable Bankable
Asset life

8. Survey result: Importance of factors in investing in developing Asian economies
Other factors: Cultural and social understanding. Land law and ease of planning regulations. Clear ability to connect to grid. Absence of corruption. Possibility for the foreign investor to be a majority owner of the assets.

9. SECTION 2: ACT renewable energy policies

10. Large-scale Renewable Energy Auctions
‘Reverse Auctions’ based on value for money
Open to projects across the National Electricity Market (NEM)
Costs recovered from all ACT electricity users via local network operator
20-year fixed feed-in tariff rate
Contract for difference approach

11. Contract for difference payments Example: FiT payments in Victoria (1/7/2016)
Payments by generators
Spot price
$/MWh
FiT price
Payments to generators

12. Renewable energy reverse auction program
20MW Solar Auction
(Fast Track)
200MW Wind Auction
200MW Wind Auction II
1MW Community Solar
200MW NextGen Auction
20MW Solar Auction
(Regular Stream)
This slide shows how we are tracking against our 100% by 2020 target.

13. FiT prices Range of FiT prices (fixed nominal for 20 years) and median price
MW (average)
2014 18
72.9
2015 15 77
2016 19
84.9

14. Project re-bidding Prices for 4 projects re-bid between the Wind 1 and NextGen auctions

15. CAPEX changes Capacity/MW for 4 projects re-bid between the Wind 1 and NextGen auctions

16. Revisions to capacity factors Capacity factors for 4 projects re-bid between the Wind 1 and NextGen auctions

17. Debt gearing ratio Range of debt gearing ratios and median ratio
Year
N = 18
MW (average)
2014 18
72.9
2015 15 77
2016 19
84.9

18. Debt costs (base rate + margin) Range of debt rates and median rate
Year
N = 18
MW (average)
2014 18
72.9
2015 15 77
2016 19
84.9

19. Internal rate of return (IRR) Range of IRR and median IRR
Year
N = 18
MW (average)
2014 18
72.9
2015 15 77
2016 19
84.9

20. SECTION 3: Managing a changing generation mix

21. 25 July 2016
Source:

22. June 2016 Source: http://energy.anero.id.au/wind-energy/2016/june

23. 25 July 2016

24. South Australia’s changing generation mix
Interconnector
Imports from Victoria
Exports to Victoria
Source:

25. Next Gen Battery Auctions
Up to $220M in network savings!
Next Gen Battery Auctions
Pilot currently underway
Next gen auctions to 2020
150+ homes,
5000+ homes, 36MW
$600k subsidy
$25M subsidy
Tesla, Panasonic, LG Chem
Winners TBA
With our aim of 90% renewables by 2020 and zero emissions by 2060, the ACT has the most ambitious greenhouse gas reductions targets of any jurisdiction in Australia and, internationally, of any state or territory reporting under the international Carbon Disclosure Project.
The ACT’s Renewable Energy Target and the Energy Efficiency Improvement Scheme are two initiatives that are placing the ACT well on the way to achieving the first interim target in Additionally the ACT has been supporting our community through helping businesses, schools and households to reduce costs of utility bills through energy efficiency measures.
In 2014 the Territory also won the Gold Banksia Award for Innovation for the reverse auction feed-in-tariff entitlement that the ACT Government adopted for the first time in Australia.

26. Conclusion
Australia has extensive experience in integrating renewables into advanced market systems
The ACT’s reverse auction feed-in tariff program has delivered investor certainty, driving down prices
We can prove potential for a 100% renewable grid by supporting renewable energy along with complementary technologies
With our aim of 90% renewables by 2020 and zero emissions by 2060, the ACT has the most ambitious greenhouse gas reductions targets of any jurisdiction in Australia and, internationally, of any state or territory reporting under the international Carbon Disclosure Project.
The ACT’s Renewable Energy Target and the Energy Efficiency Improvement Scheme are two initiatives that are placing the ACT well on the way to achieving the first interim target in Additionally the ACT has been supporting our community through helping businesses, schools and households to reduce costs of utility bills through energy efficiency measures.
In 2014 the Territory also won the Gold Banksia Award for Innovation for the reverse auction feed-in-tariff entitlement that the ACT Government adopted for the first time in Australia.