Solar PV, the STC market and the future of the RET

Transcription

1 Solar PV, the STC market and the future of the RET Ric Brazzale, March 2015 SEIA NSW meeting

2 Contents Solars role in the electricity market Solar PV market assessment STC target, market and pricing RET review where are we at? How will we go in 2015? 2

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5 Solar s role in the electricity market 5

6 NEM consumption fell 1.1% in 2014 NSW consumption reduced by 0.7% 6

7 Solar and energy efficiency making material contribution Average of 700 MW of solar PV installed in NEM each year over 2013 and 2014 Solar PV contributed 46% of reduction in power demand 7

8 Solar PV Market Assessment

9 No. of solar installations falling (2014 PV installs half of 2011 level) PV installs half the level of 2011 SWH installs one-third the level of

10 PV capacity 20% lower than peak in 2012 System size increased by 47% 10

11 Commercial sized systems 16.5% of PV market in

12 STC Modelling Report s-to-industry/ 12

13 Residential systems saturation high levels of saturation in Qld/SA Greater than 35% saturation NSW at 17% Proportion of owner occupied, detached and semi-detached homes Source: Green Energy Markets: STC Modelling Report, Dec 2014 Number of residential installations expected to decline 13

14 Quality of systems improving Source: Green Energy Markets: STC Modelling Report, Dec 2014 Tier 1 systems accounted for 35% of capacity in

15 STC s have a material impact on system affordability Based on estimate of average 3.75 kw system cost across Australia STC s provide one-third of up-front cost 15

16 Commercial sized systems increasing (23% of capacity YTD Feb 2015 cf: <16.5% in 2014) Commercial size systems are those greater than >10kW More PV Capacity in NSW than Qld in Feb 2015 NSW: 2014 Total: MW - Commercial: 48.7 MW (28.7%) 2015 YTD Total: 29.4 MW - Commercial: 9.9 MW (33.5%) 16

17 Large scale solar is negligible in Australia at present (though growing) Approx. 61,000 LGCs in 2014 and 159,000 in 2015 (1%) 55 MW operating at end more than 500 MW under development or construction (incl Solar flagships and ACT tender) As at 31 December 2014 ACT includes 20 MW Royalla project WA includes 10 MW Greenough project ACT NSW NT QLD SA TAS VIC WA Total Total number Total of 3.2 MW installed in NSW (25 projects) 17

18 Commercial big market in NSW 74% outside Sydney metro Table 7.4 Number of Commercial systems (2013 and 2014) by Urban Classification Source: Green Energy Markets: STC Modelling Report, Dec

19 PV in NSW by numbers Data as at 10 March 2015 (REC Registry) Top 10 Postcodes by installed Capacity Postcode Postcode Area Urban Classification No of Systems kw Installed 2480 Lismore Regional - High Urbanisation 4,436 11, Dubbo Regional - High Urbanisation 4,380 10, Wagga Wagga Regional - High Urbanisation 2,485 9, Liverpool Major urban - Capital City 3,615 9, Port Macquarie Regional - High Urbanisation 3,347 8, Tweed Heads Regional - High Urbanisation 3,586 8, Campbelltown Major urban - Capital City 3,509 8, Tamworth Regional - High Urbanisation 2,231 8, Wyong Major urban - Non-Capital City 3,357 8, Gosford Major urban - Non-Capital City 2,940 7,850 Urban classification Installations kw Installed Major urban - Capital City 107, ,107 Major urban - Non-Capital City 41, ,529 Other 636 1,778 Regional - High 63, ,099 Regional - Low 32, ,474 Rural 51, ,548 Grand Total 296, ,535 36% of systems and 33% of capacity installed in Sydney Metro 19

20 STC Target, market and prices 20

21 2014 STC Target how did we go? Under News 2014 Target of 18.66m STCs comprising: - STC registrations for 2014 of 16.71m - Surplus carried forward from 2013 of 1.95m 18.85m STCs were registered in % more than 16.71m target 21

22 2015 Target of million Target comprises: m for 2015 and 3.08m surplus c/f Note: figures in chart represent STCs submitted for registration (as opposed to actually registered) Non-binding estimates of 799 MW in 2016 and 830 MW in

23 Has been slow start to 2015 STC prices have drifted slightly higher Tracking 9% lower than 2014 Current spot: $39.70 GET currently paying: $ $0.30 for on-line (3 day Payt) 23

24 RET Review where are we at? 24

25 Initial Government Position (response to Warburton Review) Initial position on the RET (announced on 22 October 2014) and centres around four key elements: The RET should represent a real 20 per cent (26,000 GWh) Support for household solar systems should not be changed Pressure on energy intensive trade exposed sectors should be reduced The renewables sector should have greater clarity by removing the need for a review of the target every two years 25

26 ALP Opposition Position The ALP publicly tabled its position (together with the Clean Energy Council) on 18 December 2014 with the following key parameters: No changes to the Small-Scale Renewable Energy Scheme; Consider providing full exemption to EITE sectors from the LRET (37,000 GWh); Minimal changes to the LRET in the interest of restoring bipartisanship; Any changes must ensure sustainable investment; and Any agreement must be endorsed by both leaders of both major parties in the interest of ensuring long term certainty for the renewable energy industry. 26

27 Revised Government Position (16 March 2015) Government has softened its stance on the RET Supports a 31,000 GWh target No changes to the small-scale scheme Exempt energy intensive trade exposed industry (19 March 2015 Australian) Reported that prepared to increase target to 32,000 GWh Have also been reports that Government prepared to increase interim targets to absorb some of the oversupply 27

28 Agreement on LGC Target? ALP } Gap New Government position 28

29 How will we go in 2015? 29

30 Outlook for 2015 RET resolution likely in by end Mar 2015 (>50% chance) Possible compromise target of around 35,000 GWh by 2020? No change to SRES SRES Target set by end March implies 808 MW it broadly reflects current level of creation (modest reduction on 2014 level of 827MW) Residential installations to continue falling Commercial sized installations continue to increase SWH installations to increase slightly on 60,000 creating STCs in 2014 If the above happens the we can expect that STC price will remain stable vary $2-$4 depending on quarterly cycle BUT. 30

31 Factors to consider Changes in installed PV cost impact of falling exchange rate and anti-dumping outcome Electricity pricing and competitive response from supply side of industry Increases in fixed / non-avoidable electricity costs Network connection and access Increase competition from energy retailers (Origin and AGL have announced aggressive solar plans) also new Retailers offering solar solutions Political and community support for renewables is critical need to maintain political advocacy and need to maintain consumer support 31

32 Other emerging issues Regulator rules for system expansions beyond 100kW Choice survey (Jan 2015) 25% of customers have had issues with their PV system Recent SMH and Sydney Telegraph articles on system quality (and Minister Greg Hunt s response on system safety) 32

33 Conclusion Solar PV market seems to be stabilising at around MW Is making a material contribution to reducing demand (and emissions) and we are starting to see supply side response RET Review outcome more positive but need resolution Industry cannot take political and community support for granted 33

34 Thank you Presented by: Ric Brazzale BComm, MBA Managing Director T or ric.brazzale@greenenergytrading.com.au greenenergytrading.com.au