Welcome once again to our ASM Money business newsletter.
May! What a month it was, we started off the month with a very successful couple of days at the “Australian Solar Council, Solar Energy Exhibition & Conference” where we had the opportunity to meet and greet with hundreds of industry professionals and specialists like yourself.
Our company CEO Greg Ferrett had a fantastic talk and presentation on day one of the Conference, and demand for his narrative has been quite high since then, Have you requested a copy of his talk yet?
We started the month still celebrating news from research firm GTM that after the dismal past 3 years we have had in the solar industry, this year’s 2017 global PV demand forecast is as high as 85GW and double the amount installed in 2014.
GTM Research has forecast that by the end of 2017, India will have overtaken Japan to become the third largest PV end-market, and with the moves seen in Australia over the last month, it is nice to think of what the future holds for us as well.
After facing months of ongoing protests in QLD and around the country, Banking Giant Westpac, released a new Climate Change Action Plan, and in the process ruled itself out of ever financing Indian conglomerate Adani’s controversial mine in the Galilee Basin. Other strategies to tackle climate change in Westpac’s action plan include an A$10 billion target for lending to climate change solutions by 2020, also pledging to reduce the bank’s own carbon emissions, and improving how the bank reports on its climate change performance.
Also at the start of the month, ARENA unveiled its four main investment priorities with a focus on Battery Storage, Grid Stability and Reliability, Solar PV Innovation and Energy Productivity.
“We think we can have most impact in these four areas. This is where we are concentrating our efforts,” ARENA CEO Ivor Frischknecht said, furthermore ARENA is confident that Solar PV could provide 30% of Australia’s electricity needs by 2030.
These were quickly followed by Rob Koh of Morgan Stanley’s, who said his company expected battery storage installation to hit 1 million by 2020 behind the meter, and this is not expected to stop there, as High gas and Coal prices continue disrupting the costs of generation and therefor pricing on the NEM.
Then according to figures released by Industry Statician Sunwiz, Australia installed another 71MW of small scale rooftop solar, bringing the total installed for the first four months of 2017 to 301MW. Queensland continued to lead the way with 18MW of roof top solar installations, followed by NSW, Victoria and Western Australia with 13MW.
On may 10 we were greeted by a federal budget which had nothing to offer the renewable energy industry on the surface. Some money has been allocated to some projects approximately $265million but we must still wait on the Finkel Review to know just how serious the Federal Government really is in meeting the obligations laid out in the Paris Climate Accord.
Good thing the states are making decision to go it alone when it comes to climate change, while leadership is lacking from Canberra.
On the same day that we received news of the budget, we also found out that another massive player in the industry was filing for insolvency, SolarWorld one of the few original German companies to survive the demands at the turn of the decade, couldn’t sustain the massive onslaught of lower pricing to the OV market brought on by lower manufacturing costs from China. We have since then also found out, that the SolarWorld holdings form the USA, have also had to file for insolvency as the situation has worsen for the company. Fair Well SolarWorld.
Half way through the month we found out that an entire island had gone solar, with the island of Ta‘ū in American Samoa taking in the benefits of a 1.4 megawatt microgrid that generates power for 100% of the island and stores 6 megawatt hours of battery power from 60 Tesla Powerpacks.
The microgrid has replaced diesel generators and therefore removing the risk of power intermittency and making outages a thing of the past. It is this type of application to large projects that is opening the doors to a wider range of solutions right here at home.
By around the same time that Tesla Announced it was taking orders for its solar roof, the University of Newcastle was able to launch Australia’s first large-scale demonstration of printed solar panels, as part of the final phase of testing of the ground-breaking renewable energy technology.
“No other renewable energy solution can be manufactured as quickly. On our lab-scale printer we can easily produce hundreds of metres of material per day, on a commercial-scale printer this would increase to kilometres. If you had just ten of these printers operating around the clock we could print enough material to deliver power to 1000 homes per day,” said Professor Dastoor.
Another bit of good news was a report on an analysis of the big electricity price surges during the February heatwave in NSW, this report suggests that without rooftop solar on the homes and businesses across the state, the market price of wholesale electricity would have been higher by nearly $1 billion dollars over the three heaviest days of the heatwave.
Rooftop solar PV supplied only about 2 per cent of the state’s total power needs over that time – or about 17GWh – but its impact on the market was to cut the price of electricity by 60 per cent, delivering savings of $888 million.
Meanwhile in QLD, Coal plants failed on the day of record demand from the heatwave, leading us to ask, if Australia’s coal and gas generators were fit for purpose to power us through Next Summer’s Heatwaves?
A report from the AER looked at the soaring electricity prices on Feb 12 2017 when the heat across the state caused record demand despite the day being a Sunday when most business and manufacturing was closed, based on the report, the main reason for the price increase was the sudden withdrawal of more than 790MW of coal and gas capacity, all due to technical faults related to the heatwave.
By May 18 we were all reading about the 40MW Floating PV Power plant in China that had been grid connected and was now the largest operational floating farm in the world. According to Sungrow who commissioned the plant, the floating plant is located on flooded land with the depth of water ranging from 4 to 10 meters, according to the company.
Then for the parents and geeks in us, our favourite toymaker the LEGO Group, announced that it had reached its 100% renewable energy target a whole three years ahead of its projected schedule, thanks to the completion of its 258 megawatt Offshore Wind Farm.
The Burbo Bank Extension Offshore Wind Farm is the result of several years’ worth of work between joint venture partners lead by parent company of the LEGO Group.
Also in May, the CEC released its policy paper, Charging Forward: Policy and regulatory reforms to unlock the potential of energy storage in Australia, which outlines a package of targeted reforms to support the increased roll out of energy storage for grid scale projects.
The policy paper recommends 13 reforms across four categories to achieve this, ranging from removing regulatory barriers and rewarding the value of storage behind the meter, to protecting consumers and changes that would allow storage to support grid security through its fast frequency response capability.
Then on the home stretch to the end of the month we had another report, this time by the International Renewable Energy Agency, which showed a large increase in the number of people employed in the renewable energy industry.
The report has revealed that a total of 9.8 million people worldwide currently works in the renewable energy sector, with Solar PV being the largest employer boasting 3.1 million jobs around the world. “Falling costs and enabling policies have steadily driven up investment and employment in renewable energy worldwide since IRENA’s first annual assessment in 2012, when just over seven million people were working in the sector,” said Amin.
By May 29 the RET was been talked about in regards to the value of the LGC market price, which seemed to be in a free fall. According to Mercari, the source of our week LGC price data, FY19 futures fell 27% in just one week to $52 from the prior week’s $70.
The Clean Energy Regulator earlier in the month stated that around 4GW of new projects in FY17 and FY18 were required to meet the target.
However it is a very real argument to be made, that the target will be met, and quite possibly could be exceeded, it would be good by now to contemplate what will happen to the price of certificates if the target is exceeded?
This is a space we will all be keeping a close eye on, and hope that the government has the foresight to put in place the right framework, based on whatever the upcoming Finkel report has to say on the subject.
Then closing out the month of May, our favourite Australian communications company Telstra, signed on to build a 70MW solar farm in North QLD, in what is a move to cut energy costs to the company, and it’s the first part of the long awaited rollout of the Telstra Energy Strategy.
The deal was unveiled Ben Burge from Powershop who now heads Telstra’s Energy Division. “We are proud to be taking an active role in Australia’s transition to a lower emissions economy, complementing our long-standing energy efficiency and sustainability programs that saw our emissions intensity per unit of data fall by 56 per cent over three years,” Burge.
“The Emerald project is part of Telstra becoming a more active participant in the energy market to reduce costs while at the same time building resilience in our network and contributing to a more stable energy system.”
With the uptake of new renewable technologies as well as the improvements on storage systems and a drop-in pricing of these, the industry is now experiencing a boom across domestic and commercial solar in Australia. If we can be of assistance to you and your business in your renewable, financing or lending needs, call the ASM manager in your State or our friendly Admin team on 1300 080 163
The Queensland Labor government of Annastacia Palaszczuk has today announced a reverse auction for up to 400MW of renewables and 100MW of energy storage, as part of its $1.6 billion plan to unlock thousands of Megawatts of solar, pumped hydro and large scale solar across the state.
The plan was launched today in Brisbane in anticipation of the COAG meeting later this week and ahead of the State Budget. These plans for renewable energy and storage auctions were released as part of the overall strategy by the state, which sees Queensland reinforce its commitment to sourcing 50% of its electricity needs from Renewables by 2030, and goes a long to cement the efforts of the various State and Territory governments to strike out on their own in order to address the ongoing issues of energy prices.
“The Palaszczuk government will continue to work at the national level to support integrated policy, but in the absence of federal leadership we will not stand idly by and ignore the challenges facing the market,” Queensland energy minister Mark Bailey said on Monday.
Mr Bailey said the reverse auction, to be held in the second half of 2017, would include a 100MW energy storage solution, and would be one of the Country’s biggest, and would reflect the importance of energy storage technologies in the shift towards renewables.
“The Powering Queensland plan is firm action to ensure we continue to meet Queensland’s current and future energy needs.”
“This will be one of the largest reverse auction processes that we’ve ever seen in this country, and it will add to the clean energy boom that’s happening already in north Queensland, in the Darling Downs, in central Queensland, where we’re seeing thousands of clean energy jobs coming in to Queensland as these large-scale solar farms, 17 of them, come into our state, because of the leadership of this government,” Bailey said.
“We’ve got a whole lot of large-scale renewable energy projects, some of them absolutely fascinating mixes of wind, solar, hydro, who all want to plug in to our system,” he said. “We’ve got to update our system to make sure that those projects commence, that we get that generation coming in, but importantly, that we get more and more clean energy production happening in Queensland, because that’s where the lowest cost (generation) is happening.
“We’ve got to facilitate the new (energy generation) technology that’s coming in, that’s getting cheaper and cheaper by the year, and that’s what this plan does,” Bailey said.
Other policies included in the launch include: a Queensland Energy Security Taskforce which should help towards large-scale energy project facilitation, a plan to build a new transmission line in the north of QLD, as well as other large-scale wind and solar farms, and some hydro projects.
“The Taskforce will also lead work into developing transmission infrastructure in Queensland’s North-West to support a clean energy hub, assess the need for expanded interconnection between Queensland and other states, and investigate new hydro-electric generation sites,” Bailey said.
The Palaszczuk government is today releasing its response to the Renewable Energy Expert Panel Final Report and re-affirming our commitment to a 50 per cent renewable energy target by 2030 (RET),” Bailey said.
In a win to the renewable energy industry coming from the 2017 Federal Budget, its small business who continue benefiting from the extension to the “small business tax break”.
“Using tax benefits outlined in the 2017 budget an SME will actually get PAID to install solar in the first year – and then the electricity savings come in on top!” Greg Ferrett – ASM Money
The tax incentive announced in the 2017 Federal Government Budget extends the small business tax break. The best investment a small business can make is a renewable energy project.
Here are the numbers.
“With the small business tax breaks [announced in the federal budget], there has never been a better time to buy solar” John Grimes –Australian Solar Council
What impact to your small business if you could receive the savings with no deposit and repayments of 0.4 of the year one savings?
|i.e. 15Kw Solar System Installed for $20,000*|
|Year 1*||Year 2*||Year 3*|
|Potential Savings on Electricity||$7,200||$7,560||$7,938|
|Tax Savings (Based on federal budget)||$5,175||$-||$-|
|Cash benefits to the business||$8,085||$1,452||$1,830|
|*purchase price is based on $1.22 plus GST a watt and savings assume unit KWH cost is $0.30 and average annual production of a 15kw system over 12 months in zone 2. Actual production may vary. Repayments based on four-year chattel mortgage|
Assuming the business has an;
• Active ABN and trading for two or more years,
• A clear credit file and
• One asset backed director or business partner as guarantor (and no asset backing if in business for more than 5 years subject to credit approval)
These savings can be generated with a no-deposit finance solution and just a driving licence.
Window of opportunity
While the tax benefit has been extended, between now and 30 June 2017 there is a major opportunity to those businesses now also.
If a business wants to install solar with no deposit and are ready to install and settle by June 30th they could get the full impact of tax savings to their bottom line straight away and the bonus of ongoing electricity savings.
No cash down – savings on electricity – tax savings – GST benefit.
Call to get in touch with your local ASM Money representative to talk about the potential today.
Households on Australia’s National Electricity Market are still expected to install a total of one million battery storage units within just three years, according to the latest estimates of global investment group Morgan Stanley – in a rush to the technology driven by some of the highest electricity prices in the developed world….
From Climate Central:
Mild weather has been the norm for the region month after month for awhile now. But while these stories have become an almost monthly fixture, make no mistake. It is extremely abnormal for the Arctic — or any other part of the world for that matter — to be repeatedly blitzed by temperatures this far above normal and the impacts are reshaping the region.
Incredibly mild air is surging into the Arctic again, cranking up the heat as melt season gets underway.
From: Think Progress
Nationally, clean energy jobs outnumber fossil fuel jobs by more than 2.5 to 1, according to a new Sierra Club analysis of Department of Energy jobs data. And when it comes to coal and gas — two sectors President Donald Trump has promised to bolster through his upcoming executive order on energy regulation — clean energy jobs outnumber jobs dealing with those two fossil fuels by 5 to 1.
In a news release on Monday the environmental group said that turbines produced enough electricity to meet, on average, the electrical needs of 136 percent of Scottish households, equivalent to 3.3 million homes. This represented an increase of 81 percent compared to March 2016.
Scottish wind turbines sent more than 1.2 million megawatt hours of electricity to the National Grid in March, according to new analysis.
Renewable power keeps shattering records in the United States and around the world. Meanwhile, U.S. coal production has fallen to its lowest level since 1978, according to statistics from the federal Energy Information Administration (EIA).
A new competitor has entered the distributed generation market and is taking on solar and battery storage with a twist on co-generation technology that can produce heat, hot water and 24-hour power – as well as oxygen and hydrogen.
Uni Newcastle and Infratech unveil thermo-chemical competitor to rooftop solar and battery storage – apparently able to produce heat, hot water and 24-hour power.
One Step of The Grid:
A new, Australia-wide electricity standard has been introduced that gives networks the power to limit the size of household solar systems – including some solar plus storage configurations – and which could add significant costs to households looking to add more solar or install some battery storage systems.
The Guardian: A huge $1bn solar farm and battery project will be built and ready to operate in South Australia’s Riverland region by the end of the year.