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Political aspects of innovation: Examining renewable energy in Australia
Renewable Energy 38 (2012) 245e252
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Renewable Energy journal homepage: www.elsevier.com/locate/renene
Political aspects of innovation: Examining renewable energy in Australia Pranoto Effendi a, b, *, Jerry Courvisanos a a b
The Business School, University of Ballarat, P.O. Box 663, Ballarat, Victoria 3353, Australia Sekolah Bisnis dan Manajemen, Institut Teknologi Bandung, Indonesia
a r t i c l e i n f o
a b s t r a c t
Article history: Received 15 May 2011 Accepted 26 July 2011 Available online 15 August 2011
Despite possessing a very large potential of renewable energy sources, Australia has lagged behind other developed countries in embracing renewable energy. Various programs and policies have been devised and implemented by Australian governments. Nevertheless, the proportion of renewable energy in electricity generation in Australia has not increased significantly. This paper seeks to explain why Australia has difficulties in adopting renewable energy by using the Political Aspect of Innovation (PAI) framework to examine the causes and barriers that have blocked the taking up of renewable energy. The PAI framework is concerned specifically with public innovation policy in Australia and the way it aims to encourage and support investment in new technology development. The paper finally outlines some future suggestions for charting the progression of the Australian energy system toward a transformative sustainable future. Ó 2011 Elsevier Ltd. All rights reserved.
Keywords: Innovation policy Australia Innovation typology Renewable energy Barrier Political aspect of innovation
1. The problem: political barriers to renewable energy development Global warming and the threat of climate change caused by large carbon emissions have created interest in Australia in the move to a more sustainable energy mix. Renewable energy is the only viable option to reduce emissions, while at the same time providing Australia’s energy needs. There already exist studies with scenarios of Australia’s future energy mix predominantly utilizing existing renewable technologies. The Clean Energy Future Group envisions a scenario where solar, wind, hydro and bioenergy can provide as much as 60% of electricity in 2040 [1]. The most optimistic scenario is 100% renewable energy mix in 2020, only with solar and wind energy [2]. While not many people may share these optimistic views, these scenarios in general give a realistic picture of what Australia can achieve with the available technologies. On the other hand, it is also recognized that the transition to the use of renewable energy faces many barriers. Martin Ferguson, Australia’s Federal Minister for Resources and Energy has said, ‘The factors limiting the uptake of renewables remain technical, not political. We must have a rational science-based pathway to overcome those hurdles. Faith alone will not get us there’ [3].
* Corresponding author. The Business School, University of Ballarat, P.O. Box 663, Ballarat, Victoria 3353, Australia. Tel.: þ61 431 287 402; fax: þ61 3 5327 9405. E-mail address: [email protected] (P. Effendi). 0960-1481/$ e see front matter Ó 2011 Elsevier Ltd. All rights reserved. doi:10.1016/j.renene.2011.07.039
While this statement is true about the transition barrier in renewable energy, the technical barrier is not the only one [4]. In fact, at the level of the utility and electricity operators, Sovacool [5] finds that inertia comfort makes these operators reluctant to change. It is not about technical difficulties but the way they do their business. The introduction of renewable energy into their system represents large change in procedure, routine and culture in their activity. The other important barrier is economic which is due to market distortion (for example, the presence of subsidy) and externality (for example, the environmental benefits of renewable are not priced). Other barriers include political, financial, social, institutional, cultural and behavioral; for explanation, see [6]. Previous studies have investigated the political side of Australia’s renewable energy, such as Jones [7] from a political administration perspective and it is argued that lack of harmonization between federal and state governments create barriers to the renewable energy diffusion. Saddler et al. [1] and Diesendorf [8] have also argued that social and political barriers are very pervasive in Australia. The political barriers come from the clash of interest from incumbent fossil fuel electricity generators who oppose renewable development [9]. This creates impediment in the market by the existence of fossil fuel subsidy [10] and policy biases favoring the fossil fuel industry [11]. It has also contributed to slow process for developing commitment to form a renewable national target [12]. In the implementation aspect, the political barrier creates policy uncertainty through unusually early evaluation on renewable energy program [13] which affects the disruption in the
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finance of the program [14]. All these studies have highlighted the effect of political barriers and institutions in preventing the formation of renewable energy development support. To the best of the authors’ knowledge, few studies have attempted to explain the antecedent of these political barriers. This paper will contribute to the literature on the political economy barrier to renewable energy by specifically proposing sources of the political barriers and the mechanism by which these sources form political structure for capitalists, that in turn inhibits the development of renewable industry. It will examine Australia’s recent renewable energy development for electricity generation. The aim is to explain why Australia has been prevented from significantly adopting renewable energy despite having huge potential of renewable sources. The Political Aspect of Innovation (PAI) framework developed by Courvisanos [15] will be adopted to examine the causes and barriers that have blocked the taking up of renewable energy. The paper is structured as follows. Section 2 describes problems of renewable energy innovation and its state of play in Australia. Section 3 outlines the PAI approach to renewable energy, while in Section 4 the application of PAI to Australia’s renewable energy is then described. Section 5 concludes the paper by drawing some policy implications. 2. Innovation in renewable energy 2.1. The general problem of innovation in renewable energy In terms of generating electricity, renewable sources represent a radical change from electricity that is mainly generated by fossil fuels. The current energy infrastructure and system are built upon the foundation of fossil fuels energy that utilizes centralized transmission systems where fossil fuel plants are concentrated in particular specific places [4]. Fig. 1 depicts that currently the dominant fuel globally for energy generation comes from fossil fuels, namely coal and gas (62.3%). There are several characteristics that engender problems in renewable energy innovation and development. Firstly, the driver for the change to renewable energy comes from outside the electricity industry. Although some consumers demand green electricity, the genuine driver comes from outside the industry, this being the need to reduce carbon emissions that cause global warming and climate change. This makes transition to renewable energy difficult as the industry is comfortable with fossil fuel already providing cheap to access and very profitable electricity. For example, Table 1 depicts the cost of electricity generation by fuel type in Australia. Secondly, the nature of renewable sources themselves, apart from biomass, is that they are low density, can not be stored easily, and supply is intermittent. Thirdly, the current renewable energy
Fig. 1. World electricity generation by fuel type, 2008. Source [16]: page 24.
Table 1 Comparison of electricity generation costs in 2006e2007. Fuel
Generation cost (Australian $/MWh)
Brown Coal Black Coal Gas (combined cycle) Biomass Wind (on-shore) Geothermal Solar Photovoltaic Solar Thermal
35e40 30e35 38e54 46e80 52e72 70e110 120þ 120e150
Source: [17]
technologies themselves are low efficiency in energy conversion. For example, solar technology can normally convert about 15% of solar energy into electricity while coal and gas with a combined cycle process can achieve around 35% and 50% efficiency respectively [8]. In terms of development, renewable energy technologies are at different stages of commercialization. The most commercially competitive at the moment is wind energy, while solar photovoltaic and thermal energies come after that. While geothermal energy technology utilizing volcanic heat source has reached some level of maturity, geothermal energy that harnesses non-volcanic sources such as hot rock granite and also lower-temperature circulating waters in sedimentary basins is still in developmental stage [18]. Its real commercial cost and viability are still difficult to be determined. The same case also applies to wave and tidal energies since they are currently in the early stage of commercialization [19]. These various different renewable energies and their different commercialization stages mean that renewable energy development still require continuous large funding and need various (and varied) corresponding innovation policies to make them competitively viable vis-à-vis fossil fuels. Another problem facing renewable innovation is the market competition from other types of fossil fuel energy sources such as gas (which has low carbon emissions), clean coal with carbon capture and sequestration, and nuclear energy. Such technologies are highly centralized and can fit into the current transmission system very easily. Yet, in the public agenda, these alternative fossil fuel technologies are positioned as viable alternatives to renewable energy technologies in mitigating the carbon emissions problem [20]. The last problem is that electricity is a huge system represents large inertia that tends to preserve the longevity of fossil fuels [21]. 2.2. The state of renewable energy in Australia Australia has abundant supply of renewable energies such as solar, wind, wave, tidal, biomass and geothermal energy and all of these energies have now being developed in Australia [19,22]. Australia has engaged in research and development (R&D) of solar water heater since early 1950s and became the world leader in this area in the 1960s. Throughout the 1970s Australia developed solar panels for remote area application where there was no electricity available, and in 1985 the first silicon solar cell with 20% efficiency was invented at UNSW [23]. However, since Australian Governments did not provide adequate incentives, this solar technology was taken to China and within a couple of years became one of the largest producers of solar panels in the world [20]. In Australia, the commercialization of renewable energy has not developed in any way close to matching the R&D expertise that has been shown by Australian scientists in solar power. The first serious wave of renewable energy uptake did not start until as late as 1997 when the Howard Government declared Australia’s commitment to
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developing renewable energy as part of its energy plan to reduce carbon emissions [12]. As a result, a market for renewable energy was created by specifying a Mandatory Renewable Energy Target (MRET) in 2001 for which electricity retailers needed to purchase ‘green’ or renewable energy certificates which could be surrendered according to the obligatory amount prescribed to them [12]. The MRET scheme has been successful in attracting green electricity generators, especially those that are of mature technologies such as hydropower, solar panel and water heaters, and wind power [13]. Although the Howard Government decided not to extend the MRET scheme beyond 2010, it was then expanded in August 2009 under the Rudd Government into a new larger Renewable Energy Target (RET) to produce an additional 45,000 GWh of renewable energy per year by 2020, representing 20% of electricity generation. To promote large scale renewable generators, on 24 June 2010, there was an amendment to the RET by differentiating between large scale renewable energy target (LRET) such as wind farms, solar plants and geothermal facilities; and also small scale renewable energy target (SRET) such as solar panels and solar hot water systems [24]. Besides creating a market through renewable energy certificates, Australian governments also supported the commercialization of renewable energy by various other initiatives. A budget of $700 million was invested in R&D and demonstration projects on Low Emissions Technology Fund, Solar City trials, Renewable Energy Development Initiative, Advanced Electricity Storage Technologies, and Wind Forecasting Capability [19]. The Renewable Energy Commercialization Program (RECP) with a budget of $50 million was created to promote renewable technologies such as thermal and solar photovoltaic projects, projects on biomass, landfill, geothermal, wind power, and also complementary systems such as batteries and inverters. To encourage the deployment of solar energy in the households, the government designed the Photovoltaic Rebate Program (PVRP). For the remote areas there was Renewable Remote Power Generation Program (RRPGP) with the goal to replace diesel generators. Small innovative companies were also supported financially by Renewable Energy Equity Fund (REEF) through venture capital [19]. In addition to the Federal Government initiatives described above, a number of states also create programs to increase the contribution from renewable resources. For example, the Victorian Government has created the Energy Smart Business Program and the Renewable Energy Support Fund (RESF) to attain a target that 10% of Victoria’s electricity sourced from renewable sources. Other states such as New South Wales and Queensland also promoted renewable energy but with slightly different programs. Despite all the initiatives above, compared with other developed countries, the proportion of renewable energy in electricity generation in Australia is still very small as evident in Fig. 2. Between 1990 and 2001, Australia only had average growth rate of 4% in contrast to OECD countries’ average rate of 17% [25].
Fig. 2. Electricity generation in Australia, 2007e2008. Source [26]: page 21.
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Comparing Figs. 1 and 2, 93.1% of Australia’s electricity was generated in 2007e08 by fossil fuels, whereas these fuels only contributed 67% of the world’s electricity generation (including less developed economies) in 2006. There are four challenges currently confronting efforts to deploy renewable energy in Australia. The first challenge is Australia’s vast geographic area. This needs an investment in complementary grid and transmission lines. Secondly, a weakly developed market for carbon under the 2009 proposed emission trading scheme (ETS) failed to be implemented and the demand for renewables now relies only on the RET and green voluntary markets. The third challenge is the Australian electricity industry structure which is dominated by fossil fuels that are highly centralized where distributed renewable energy cannot easily be integrated in the existing electricity system. The last challenge is the lack of investment from the private sector, partly due to the current financial crisis. All these challenges pose some serious barriers to the successful deployment of renewable energy in Australia. 3. Political aspect of innovation approach The Political Aspect of Innovation (PAI) framework is conceptualized to understand the role of innovation policy in the public domain as governments now increasingly make innovation the core in policy formulation for economic development. Attention is concentrated on the response of the main economic agents, namely entrepreneurs and capitalists, in reacting to innovation policy put forward by government. The concept is derived from Kalecki’s perception of fear possessed by the capitalists when government implements full employment policy devised to reduce the dangerous effect of the business cycle [27]. Whereas John Maynard Keynes gave the world the theoretical Keynesian tools to combat unemployment, the political economy reality identified by Kalecki [27] is that as the economy reaches a peak in the business cycle, capitalists’ fears of full employment ensure that macroeconomic policies to achieve full and permanent employment are thwarted. As such, Kalecki recognizes the class based nature of public employment policy. Kalecki [27] identified three fears of full employment possessed by the capitalists in this regard. First is the fear of losing economic control. This relates to its market power influence that is diminished by the new firm entry to their industry to chase profits as government puts more financial incentives to the industry to boost employment. Second is the fear of losing policy control. This relates to public investment spending extending the power of the state over the role of capitalists in making the investment decisions. Fear arises because capitalists reduce their investment spending as industry profits begin to slow down at the peak of the cycle, while at the same time government continues to induce further new public investment. Third is fear of losing industrial control links to labor relations in the industry. Capitalists recognize and ‘fear’ that it is more difficult to exert influence over labor power as unions and employees become strong and emboldened by expectations in the maintenance of full employment. PAI is also based on class analysis that applies these same three fears, but this time in relation to innovation and not to employment. Rothbarth [28] argues that uncertainty created by the innovation process leads to strong dependence of physical investment (whether by equity funds or by leverage with debt funds) on current profits. To Rothbarth, it is this argument which connects Schumpeter’s innovation to the work of Kalecki on investment. Synthesis between Schumpeter and Kalecki, identified by Rothbarth, provides the starting point for the PAI critique of the role of innovation and public innovation policy in the current situation where there is a struggle between the monopoly power enshrined
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in evasive carbon polluting innovation, and the emerging transformative power of new radical eco-sustainable technologies. The PAI analysis relates to innovation activity enshrined by uncertainty that is induced by government policy, bringing new products or services into the marketplace that impact on the industry where the incumbent capitalists have controlling power [15]. The effect of this uncertainty and public innovation policy to the capitalists will be the three fears. One is the loss of capitalist’s economic power as new innovative capitalists enter into the market, reducing the market share of the incumbent capitalists. The second fear is the loss of policy control relating to more public investment being directed toward new innovation and endorsed by government (sometimes referred to as ‘picking winners’). Thus, this loss of policy power fear exists as the new investment undermines the incumbent capitalist to influence the business decision in the industry by their own means of investment endeavor. The third fear of loss of industrial power also develops as labor (and thus employees) becomes more secure under innovation-supported industries, which leads to stronger industrial bargaining power (whether as individuals or part of unions). The PAI approach also recognizes that in this third fear is the issue of power balance between factions of capital; where, for example, innovation-based expansion by industrial capitalists loses out to speculative-based financial capitalists during financial booms. From this concept, Courvisanos [15] then identifies the consequences of these fears to the innovation venture initiated by the government’s innovation policy. The incumbent capitalists try to capture the opportunity from the innovation policy by diverting it to extend their industry dominance which currently in their control. This creates what Courvisanos [15] calls evasive innovation. By the same token, this type of innovation may inhibit radical or transformative innovation that the original policy intends to generate in the first place. This PAI framework is useful in enriching our understanding on how an innovation policy can fail to materialize its goal. The political economy angle of this concept is expected to contribute to the literature on the important effect of political structures and institutions in promoting a new transformative economic development. The framework can be especially helpful in answering why during the peak of a business cycle it is difficult to introduce such economic transformation. It is usually during recession times that transformation is likely to occur, since numerous means of production are idle due to low economic demand. With the help of government’s innovation policy, the incumbent capitalists then will have less to fear and can be more easily persuaded to replace their capital goods with innovationembedded new capital goods [15]. This framework is also useful to inform the mechanism through which the political process affects the transition to a sustainable economic future. As many people increasingly feel the effect of global warming and climate change, it is imperative to adopt a sustainable development paradigm in pursuing economic growth and sustaining the quality of life. In the domain of securing energy needs, this sustainable paradigm necessitates the adoption and development of renewable energy [8]. In the next section the PAI framework will be applied to the development of renewable energy in Australia as a transformational innovation.
4.1. Economic power From the context of the technology of energy production, economic power is in the hands of the electricity generation industry. The electricity generation industry that feeds on to the national grid in Australia is currently heavily dominated by fossil fuels. The abundant cheap supply of brown and black coal means Australia is endowed with a stable and low electricity price. This in turn promotes the development of emissions-intensive industries that use an enormous amount of electricity in their production; e.g. aluminum, steel and liquefied natural gas (LNG). High overseas demand for the output of these trade-exposed emissions-intensive industries has made them main contributors to export income and government revenue [25]. This leads back to the effort to expand the electricity industry and in this way a fossil fuel positive feedback loop is created. All this makes the incumbent fossil fuel electricity generation industry hugely economically powerful as it is intricately linked to traditional employment-based commodities and manufacturing sectors. It is important to appreciate that this engenders structural inertia and amplifies other barriers such as lack of financial support, lack of regulatory framework, lack of R&D culture, lack of involvement of stakeholders in decision-making and also market distortions such as subsidies. This fossil fuel electricity generation scenario creates substantial barriers for renewable energy which then results in only small niche off grid renewable energy applications in the remote areas that are successful mainly due to government subsidy [29]. In the energy sector, Australia also has made itself a leader in energy export. The high demand and large contracts for fossil fuels has made Australia increase its energy export earnings by 66% to $78 billion in 2008e2009 [26]. The importance of energy exports within Australia’s commodity export earnings is evident in Fig. 3, while Fig. 4 shows the enormous growth of these exports over 30 years since 1980. The economic and trade structures created by the fossil fuel energy resources gave rise to a major obstruction for development of renewable energy resources [25]. The global economic boom through the first decade of the 21st Century gave these structures
4. The application of PAI to Australia’s renewable energy development Application of PAI requires separate analysis of the three capitalists’ fears under uncertainty that engender the barriers to renewable energy e economic power, policy control and industrial power.
Fig. 3. Major Australian commodity exports. Source [26]: page 3.
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Fig. 4. Australian energy exports 1980e2009. Source [26]: page 2.
a sense of solidity which was not disturbed by recent global economic events. The global financial crisis which started around the middle of 2008 apparently did not substantially affect the Australian economy. Since April 2009, there have been price increases in most of Australia’s resource commodities that reflects the strong growth of China [26] after its own massive public stimulus prevented significant economic downturn. This resource boom has resulted in extension of the long business cycle expansion in Australia. In these circumstances, the PAI predicts that the development of renewable energy that represents a sustainable innovation will be hindered. The incumbent resources-based and emissions-intensive capitalists will pursue evasive innovation to take advantage of the effective Australian Government stimuli introduced to prevent recession, thus capturing all the benefits and hindering further transformative innovation through renewable energy.
4.2. Policy control Policy control is also a driver of incumbent power. There has been very strong political opposition in Australia in any public policy attempt to stop the use of coal so as to reduce carbon emissions [9]. This is in strong resonance with the position taken by the Federal Labor Government, expressed by Energy Minister Martin Ferguson who sees carbon capture and sequestration as important in extending the viability of coal industry. This support for fossil fuels and modest gestures to renewable development is argued by Falk and Settle [9] as politically acceptable while lessening the government effort to reduce energy consumption. This is reinforced by the lack of vision of the leadership shown by former Prime Minister John Howard and his conservative government during its eleven year reign until late 2007. This political alliance between incumbent fossil fuel industries and the conservative Howard Government made for a relaxed approach to energy policy that is consistent with the use of fossil fuels in electricity generation [25]. The actions of the Labor Government with Energy Minister Ferguson since late 2007 have reinforced this approach [30]. In this policy scenario, evasive innovation takes the form of maintaining the status quo of public subsidies and incentives that are enjoyed by the fossil fuel industries. This stems from vested interest in the big resource industries and their influence. The large profits that are accumulated from this business area is then invested in extending the life of the industry by inventing and commercializing technologies that support their technology system such as cogeneration, combined cycle, carbon capture and sequestration (CCS). Power influence of the incumbent industry appears in at least two forms. First form relates to the physical and financial resources
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taken away from renewable energy sector. These resources dominantly captured by the incumbents include public subsidies, R&D funds and institutions, financial infrastructure, and so on. In terms of subsidy, according to Riedy [10], it is estimated that the subsidy to the energy sector amounts to $10 billion annually which mostly goes to the fossil fuel sectors while only 4% in 2005-06 went to support renewable and energy efficiency. Diesendorf [8] estimated that this subsidy consists of an amount of $6.5 billion per year to support the use of fossil fuel and its ‘corresponding vehicles’. In development and deployment arrangements, the Australian Coal Association, for example, has asked the federal government to support their project on CCS by requiring more funds and extend further the implementation time of CCS [31]. Thus, most of the carbon emissions reduction funds were used for clean coal and other low-emission technologies and not renewable energy [19]. As a result, there was less financial support for renewable energy development both in research and demonstration, as well as in technology deployment [22]. Lobby from powerful industry takes place in limiting the integration of renewable electricity to the grid and the lessening of the efficiency standards in the building code [8]. Thus, there is less financial support for renewable energy development both in research and demonstration, as well as in technology deployment [22]. As an example of the impact of this lobbying, photovoltaic technology commercialization in Australia ran on a low budget, by the world standard [32]. Most renewable energy commercialization funding was directed to developing clean coal and other low-emission technologies [33]. In this context, the R&D business spending (and the subsidies and tax concessions from the public purse) is basically dominated by the fossil fuel sector, as can be seen in Fig. 5. Powerful lobbying also takes place between individuals that form coalitions between stakeholders in supporting the fossil fuel energy industry. The closeness of CSIRO and BHP Billiton in promoting and doing common research is an example [34]. The second form of power influence is the institutional circumstance in which reducing carbon emissions legislation is designed so that regulatory framework and social conditions are not beneficial for renewable energy development. This regulatory framework and institutional conditions include the policy environment, regulation alignment, routines and procedures. In the end, this creates uncertainty for all stakeholders in investing for renewable energy [14]. Nill and Kemp [35] show how such economic uncertainty in the political context provides what they call ‘policy constraints’ to sustainable innovation policies. Further, uncertain political mood in federal government has also shackled a favorable environment for renewable investment that the MRET program intended to make [13]. In 2002, the Parer Review was conducted only two years after the MRET was implemented; whereas usually most new legislative acts are reviewed after five years in operation [7]. This review mainly recommended that the MRET should not be continued as this measure was an expensive way to combat global warming. It recommended instead the implementation of an emission trading scheme. Later on in 2003 another review called the Tambling Review was commissioned to examine the MRET. Contrary to the previous review, it recommended the extension and expansion of the MRET as this measure’s purpose was to build a new renewable industry, not just mitigating carbon emission per se [7]. The then Prime Minister John Howard used these two review to reject the extension, let alone expansion, of MRET with the argument that this is an expensive item for the government budget and that by this measure, the government is picking winners, i.e. renewable energy [7]. To demonstrate the powerful lobby of the incumbent industry, Kent and Mercer [12] documented that the 2% target in the MRET program was the result of a long debate that was won by the
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Fig. 5. Australian business R&D by objective, 2007e2008. Source [26]: page 70.
energy-intensive industry with a percentage which was within their comfort zone but too low as a target to overcome commercialization barriers. The target in percentage was deliberate as the electricity consumption grew, 2% target at 2001 would be 0% at 2010 [12]. The target was then reached four years earlier than intended due to strong industry growth [13]. RET design was also ill structured to generate large scale deployment of renewable energy, since it included solar and heat pump hot water system. Even waste coal mine gas was also included that could act as subsidy to the coal industry [14]. The decision not to extend the MRET by the Howard Government and the attainment of the 9500 GWh target created political and investment uncertainty. Investment in renewable energy was declining. The Howard Government also closed its Cooperative Research Centre for Renewable Energy (CRC-RE) [36]. Later on in 2004, the energy white paper was published by the Howard Government that marked the end of direct renewable energy industry support. In the white paper, government measures were directed toward R&D and commercialization of various technologies that were considered to have potential for reducing emissions. The Howard Government made a strong commitment to other ‘clean’ technology, notably clean coal with carbon capture and sequestration which took $500 million out of the $700 million of the budgeted commercialization fund [19]. Although these new measures are market friendly, Sonneborn [37] argues that market based approach is unlikely to be successful if it is not accompanied with complementary regulatory or target-oriented policies and programs. Emphasis on market based only results in inconsistent support that will not be beneficial to renewable energy development. This is because the energy market is distorted by subsidy support for the incumbent industry, and suffers from externalities and unfavorable climate for distributed power generation [37]. As a result, the lack of coherence in renewable policies and the prevailing old regulatory regimes inhibit the formation of a strong ‘renewables coalition’. In Australia, the fossil fuel coalition seems to exert more influence than its renewable energy counterpart [11]. The formation of national electricity market (NEM) that connects almost 90% of consumers in Australia by privatization and market reform can be viewed as the way the incumbent industry manages to prolong their predominance. This is because the main purpose of NEM is to create efficient markets and lower electricity prices. Only big incumbent generators and utilities can take advantage of this reform due to the large capital they possess. Most renewable energy generators usually are small firms and are prevented from taking advantage of such benefits. However, Jones [7] maintains that the Howard Government reforms made the connection of renewable energy to the national grid possible. With the simplified procedures, generators can start supplying electricity
to the grid as long as they can secure a contract agreement with the retailers who buy the electricity for a certain period of time and secure necessary capitals from financial institutions. However, the downside of this reform is that the costs of grid connection, and also transmission augmentation and reinforcement are still to be paid by the renewable generators. In addition, in terms of regulation, favorable standards and codes for integrating renewable energy into the grid are still in their infancy [38]. From the above pattern identified, if there are any policies about to be implemented to promote renewable energy such as carbon price and RET, these policies will be opposed by powerful incumbents arguing that such policies will harm their industry. The reason that the incumbents use in promoting their cause is that any increase in electricity price would drive down this industry’s competitiveness in the international market [26]. The final impact of this evasive innovation is the low take up of renewable which in turn also means that economies of scale and learning are limited [39]. Following this, technical barriers are at work. To overcome the barriers, more investment in R&D and also in demonstration projects is required to create positive feedback for renewable energy [22]. However, the low take up means only a small local market is developed and a negative feedback occurs as shown in Fig. 6. In the case of photovoltaic, for example, it is difficult for the existing manufacturer, BP Solar, to stay in production with 70% of its product already for the overseas market [32]. Nevertheless photovoltaic rebate in 2000 was very successful in attracting the on-grid application of photovoltaic panels at residential houses. Before the rebate, the panels were only used in remote off grid applications [32]. Investment is crucial in renewable energy to alleviate the intermittency problem of some renewable sources such as wind energy by developing storage and also wind forecast technologies [22].
Fig. 6. Detrimental negative feedback for renewable energy.
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The prevailing domination of the incumbent fossil fuel electricity generation industry in Australia is so conspicuous that Schlapfer [11] argues there is a concealed partiality in Australia’s energy policy favoring fossil fuels. It shows double standards. When it comes to renewable energy with its intermittency and storage problem, the Australian Government argues that the challenges are enormous, but when it is about ‘clean coal’ with CCS technology, the government says it is just a matter of time to achieve it [11]. Recent studies show that CCS will not be commercially available until at least 2020 [8]. 4.3. Industrial power The third PAI fear is driven by industrial power. This is a complex element made up of union/employee relations and fractions of capital relations. Influence of the unions in Australia presents as a manifestation of fear of losing industrial control as happened in the battle over interests between plantation industry and natural forest logging industry [30]. In general, as more employment is created in the renewable sectors (see Table 2), there is fear of losing influence over the labor resource by the incumbent industry since labor can move out to the renewable sectors. Based on the review of 13 studies, Kammen et al. [40] show that the renewable sector can create significant large employment. In terms of per unit of energy delivered (megawatt), it can employ more people than the fossil fuel sector. In this context of loss of jobs, there is a long history in Australia of union collaboration with incumbent emissions-intensive industries to protect jobs against the environment, notably in forestry with a ‘rearguard action’ to preserve native forest logging as detailed by Ajani [41]. When dominant industries are being threatened through innovation, they engage in an industrial alliance to protect profits and jobs against the potential of new jobs in sustainable green industries of the future. Energy Minister Ferguson comes from a strong traditional industrial unionist background that ensures support for the dominant non-renewable electricity industry. This creates a wedge between fractions of capital, with innovative green capitalists being marginalized both from the capitalist perspective (with great difficulties in obtaining finance and other resources) and from a public policy perspective (with public innovation support for the evasive innovation of the dominant fraction of capital). The fractions of capital have splintered and widened after the August 2010 national elections in which the Labor Government required the alliance of regional independents and The Greens party to secure a second term. This has created great uncertainty, especially with The Greens party gaining the balance of power in the Upper House of the bicameral parliamentary system. This has created more fear of the loss of industrial control by the dominant fossil fuel industry which has splintered perceived unity. BHP Billiton CEO, Marius Kloppers came out in a major speech on 15 Table 2 Australian employment for different types of base-load power stations. Power station (Name)
Description
Australian content (% of Cost)
Tarong North
Coal fired, rated 450 MW Wind farm, rated 21.6 MW Cogeneration,rated 30 MW Fuel: bagasse & sawmill waste
26
49
44
120
50
220
Albany Wind Farm Rocky Point
Source: [42]
Total Australian employment (job-yr/TWh)
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September 2010 for Australia to embrace a carbon price urgently and ahead of any global agreement [43]. This seemed counterintuitive for a fossil fuel sector that had supported the ‘no carbon price’ position of the opposition conservative party. However, with many broad commercial interests, including uranium and LNG, BHP sees the Greens as having the political power to push radical carbon price and green industry support polices that would transform Australia significantly away from fossil fuel trade and energy. Better, BHP judges, to put on the agenda a ‘mosaic of initiatives’ that would provide a fossil fuel ‘trade-friendly’ carbon price regime with rebates of emissions costs for trade-exposed industries [44]. BHP can see a benefit over other fossil fuel companies in this more complex evasive innovation support scheme. Not surprisingly, other factions of the fossil fuel sector that are less trade-exposed and have the ‘dirtiest’ carbon emitting electricity power plants (like brown coal Hazelwood power plant in Victoria) see the BHP agenda as a threat to their existence. Thus, in the context of Kloppers’ speech, capital has split in two. The Australian Chamber of Commerce & Industry (constituency: small-to-medium capitalists) and the National Farmers’ Federation (constituency: agrarian capitalists) e along with the conservative business-oriented major opposition e are against any carbon pricing policy. Aligned in favor along with BHP Billiton are The Business Council of Australia (constituency: larger capitalists) and the Australian Industry Group (constituency: broad business representation, including innovative sustainable capitalists). The PAI struggle for industrial power by workers and capitalists in established unsustainable industries to defend evasive innovation against the rise of transformative sustainable innovation is bound to result in delays toward renewable energy that could leave Australia on the ‘tail end’ of the changes globally to a green future. 5. Some implications and concluding remarks This paper has attempted to demonstrate that PAI is useful in understanding the political economy dimension of the barriers that prevent the introduction of renewable energy. As such, the PAI analysis can be used to explain the delay and slow growth of renewable energy in Australia. The PAI analytical framework can inform the public innovation policy in Australia and the way it aims to encourage and support investment for energy producers by paying attention to the role of powerful lobby from the incumbent industry. The usefulness of this framework manifests in the distinction between evasive innovation which favors incumbency, in this case the fossil fuel industry; rather than the renewable energy industry which engenders transformative innovation. From this perspective, the political barriers identified in the PAI analysis places the technical problems to renewable energy in a sharper and clearer focus. The powerful incumbents argue that transition to renewable energy is a difficult technical matter due to such supply problems like lumpiness of construction and intermittent power into a centralized grid. What the PAI analysis does is expose such arguments as camouflage in their attempts to maintain economic and political power. From a community-based ecologically sustainable position, it can be argued that technical solutions to the supply problems such as decentralization through ‘renewables’ would help to overcome lumpiness of supply construction and also allow for the development of effective storage and wind forecast technologies to solve the intermittent nature of renewable energy. Resolution of the political and economic debate on sustainable development in general and renewable energy in particular, is a long way away. Thus in practice, the development of renewable energy cannot be left to the mercy of ‘market forces’ e re: incumbent power e alone. To overcome the barriers of renewable energy,
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comprehensive measures need to be taken that include among others, the phasing out fossil fuel subsidies, feed-in-tariff, and correct electricity pricing [45]. For Australia, despite the various ranges of measures introduced (RET, Feed-in-Tariff), Buckman and Diesendorf [17] find that due to policy design limitations, these measures will not achieve the 2020 target to have 20% electricity from renewable energy. Due to quick economic recovery out of the global financial crisis in Australia through strong effective public sector stimuli domestically and in China, the PAI approach recognizes that the commodity based export boom has continued Australia’s ‘Lucky Country’ mentality. This prevents any major consideration of the need for a paradigm shift in Australia’s economic direction, and delaying further consideration of a transformation to sustainable development using the renewable energy resources naturally endowed to this nation. There are two transition paths to a sustainable renewable energy future. The draconian one arises from the barriers identified in the PAI analysis above. This is based on waiting for a major economic depression forcing sudden and debilitating structural change as coal demand peaks with the world moving exorable to a fossil fuel free economy and Australia is left well behind in the transformation. The affirmative transition path is immediate resolution of the PAI conflicts through planned restructuring using an eco-sustainable policy framework as outlined in Courvisanos [46] which rejects the negative feedback of the current evasive innovation position so clearly identified by the PAI analysis in this paper. Acknowledgments The authors thank the participants for their constructive comments and valuable inputs at two conferences: the 2010 “Spirit of Innovation IV” Forum: Environment, Innovation and Sustainable Development, 7e8 October 2010 Euromed Management School, Marseille and the Ninth Society of Heterodox Economists Conference, 6e7 December 2010,University of New South Wales, Sydney. References [1] Saddler H, Diesendorf M, Dennis R. A clean energy future for Australia. Sydney: Clean Energy Future Group; 2004. [2] Wright M, Hearps P. Australian sustainable energy e zero carbon australia stationary energy plan. Melbourne: University of Melbourne; 2010. [3] Dopita M, Williamson R. Australia’s renewable energy future. Canberra: Australian Academy of Science; 2009. p. 2. [4] Unruh GC. Understanding carbon lock-in. Energy Policy 2000;28(12):817e30. [5] Sovacool BK. The intermittency of wind, solar and renewable electricity generators: technical barrier or rhetorical excuse? Utilities Policy 2009; 17(3e4):288e96. [6] Painuly JP. Barriers to renewable energy penetration: a framework for analysis. Renewable Energy 2001;24(1):73e89. [7] Jones S. The future of renewable energy in Australia: a test for cooperative federalism? Australian Journal of Public Administration 2009;68(1):1e20. [8] Diesendorf M. Greenhouse solutions with sustainable energy. Sydney: UNSW Press; 2007. [9] Falk J, Settle D. Australia: approaching an energy crossroads. Energy Policy; 2010. doi:10.1016/j.enpol.2009.12.028. [10] Riedy C. Energy and Transport Subsidies in Australia: 2007 Update, prepared for Greenpeace Australia Pacific. Sydney: Institute for Sustainable Futures; 2007. [11] Schlapfer A. Hidden biases in Australian energy policy. Renewable Energy 2009;34(2):456e60. [12] Kent A, Mercer D. Australia’s Mandatory renewable energy target (MRET): an assessment. Energy Policy 2006;34(9):1046e62. [13] Kann S. Overcoming barriers to wind project finance in Australia. Energy Policy 2009;37(8):3139e48.
[14] Valentine S. Braking wind in Australia: a critical evaluation of the renewable energy target. Energy Policy; 2010. doi:10.1016/j.enpol.2010.02.043. [15] Courvisanos J. Political aspects of innovation. Research Policy 2009;38(7): 1117e24. [16] International Energy Agency. Key world energy statistics; 2010. Paris. [17] Buckman G, Diesendorf M. Design limitations in Australia renewable electricity policies. Energy Policy; 2010. doi:10.1016/j.enpol.2010.02.009. [18] Geoscience and ABARE. Australian energy resource assessment. Canberra: Commonwealth of Australia; 2010. [19] Commonwealth of Australia. Renewable power: a case study into selected renewable energy sectors in Australia for the inquiry into developing Australia’s non-fossil fuel energy industry, background information e interim report. Canberra: House of Representatives, Standing Committee on Industry and Resources; 2007. [20] McNeil B. The clean industrial revolution: growing australian prosperity in a greenhouse age. Sydney: Allen and Unwin; 2009. [21] Jacobsson S, Bergek A. Transforming the energy sector: the evolution of technological systems in renewable energy technology. Industrial and Corporate Change 2004;13(5):815e49. [22] Jolley A. Technologies for alternative energy, climate change working paper No.7, Centre for Strategic Economic Studies. Victoria University; 2006. [23] Green M.A. Australian photovoltaic research and development, 29th IEEE photovoltaic specialists conference record. New Orleans, USA; 2002. p. 9e14. [24] de Wit A. Australia: amendments to renewable energy target scheme passed, legal update, http://www.mondaq.com/australia/article.asp?articleid¼103870; 28 June 2010 [accessed 01.08.10]. [25] Kinrade P. Toward a sustainable energy future in Australia. Futures 2007; 39(2e3):230e52. [26] Australian Bureau of Agricultural and Resource Economics. Energy in Australia 2010. Canberra; 2010. [27] Kalecki M. Political aspects of full employment. Political Quarterly 1943;14(4): 322e31. [28] Rothbarth E. Review of business cycles by J.A. Schumpeter. The Economic Journal 1942;52(206e207):223e9. [29] McHenry MP. Remote area power supply system technologies in Western Australia: new developments in 30 Years of slow progress. Renewable Energy 2009;34(5):1348e53. [30] Manning P. Union influence a worry for the developing green path. The Age August 2010;21. Business Day, p.2. [31] Australian Coal Association. ACA Policy Brief e CCS: On the path to deployment; June, 2010. [32] Watt M. The commercialization of photovoltaic research in australia, a report for science and innovation mapping. Department of Education Science and Training; September, 2003. [33] Australian Greenhouse Office. Renewable energy commercialization in Australia. Canberra; 2003. [34] Manning P. A poor climate for debate at CSIRO. The Age July 2010;3:2. Business Day. [35] Nill J, Kemp R. Evolutionary approaches for sustainable innovation policies: from niche to paradigm. Research Policy 2009;38(4):668e80. [36] Photovoltaic Bulletin. Australia closes renewable energy research centre, An International Newsletter, February. Elsevier; 2003. [37] Sonneborn CL. Renewable Energy and market-based approaches to greenhouse gas reduction e opportunity or obstacle? Energy Policy 2004;32(16): 1799e805. [38] MacGill I. Electricity market design for facilitating the integration of wind energy: experience and prospects with the Australian National Electricity Market. Energy Policy; 2009. doi:10.1016/j.enpol.2009.07.047. [39] Healey G, Bunting A. Wind power in Australia: overcoming technological and institutional barriers. Bulletin of Science Technology Society 2008;28(2): 115e27. [40] Kammen DM, Kapadia K, Fripp M. Putting renewables to work: how many jobs can the clean energy industry generate? rael report. Berkeley: University of California; 2004. [41] Ajani J. Forest wars. Melbourne: Melbourne University Press; 2007. [42] MacGill I, Watt M, Passey R. The economic development potential and job creation potential of renewable energy: Australian case studies, commissioned by Australian Cooperative Research Centre for Renewable Energy Policy Group. Australian Ecogeneration Association and Renewable Energy Generators Association; 2002. [43] Arup T, Morton A. BHP’s move puts carbon tax back on Gillard’s agenda. The Age September 2010;17:1. [44] Manning P. Suddenly, green’s back in fashion. The Age September 2010;18:2. Business Day. [45] Sovacool BK. The importance of comprehensiveness in renewable electricity and energy-efficiency policy. Energy Policy 2009;37(4):1529e41. [46] Courvisanos J. A post-keynesian innovation policy for sustainable development. International Journal of Environment, Workplace and Employment 2005;1(2):187e202.
Contents lists available at ScienceDirect
Renewable Energy journal homepage: www.elsevier.com/locate/renene
Political aspects of innovation: Examining renewable energy in Australia Pranoto Effendi a, b, *, Jerry Courvisanos a a b
The Business School, University of Ballarat, P.O. Box 663, Ballarat, Victoria 3353, Australia Sekolah Bisnis dan Manajemen, Institut Teknologi Bandung, Indonesia
a r t i c l e i n f o
a b s t r a c t
Article history: Received 15 May 2011 Accepted 26 July 2011 Available online 15 August 2011
Despite possessing a very large potential of renewable energy sources, Australia has lagged behind other developed countries in embracing renewable energy. Various programs and policies have been devised and implemented by Australian governments. Nevertheless, the proportion of renewable energy in electricity generation in Australia has not increased significantly. This paper seeks to explain why Australia has difficulties in adopting renewable energy by using the Political Aspect of Innovation (PAI) framework to examine the causes and barriers that have blocked the taking up of renewable energy. The PAI framework is concerned specifically with public innovation policy in Australia and the way it aims to encourage and support investment in new technology development. The paper finally outlines some future suggestions for charting the progression of the Australian energy system toward a transformative sustainable future. Ó 2011 Elsevier Ltd. All rights reserved.
Keywords: Innovation policy Australia Innovation typology Renewable energy Barrier Political aspect of innovation
1. The problem: political barriers to renewable energy development Global warming and the threat of climate change caused by large carbon emissions have created interest in Australia in the move to a more sustainable energy mix. Renewable energy is the only viable option to reduce emissions, while at the same time providing Australia’s energy needs. There already exist studies with scenarios of Australia’s future energy mix predominantly utilizing existing renewable technologies. The Clean Energy Future Group envisions a scenario where solar, wind, hydro and bioenergy can provide as much as 60% of electricity in 2040 [1]. The most optimistic scenario is 100% renewable energy mix in 2020, only with solar and wind energy [2]. While not many people may share these optimistic views, these scenarios in general give a realistic picture of what Australia can achieve with the available technologies. On the other hand, it is also recognized that the transition to the use of renewable energy faces many barriers. Martin Ferguson, Australia’s Federal Minister for Resources and Energy has said, ‘The factors limiting the uptake of renewables remain technical, not political. We must have a rational science-based pathway to overcome those hurdles. Faith alone will not get us there’ [3].
* Corresponding author. The Business School, University of Ballarat, P.O. Box 663, Ballarat, Victoria 3353, Australia. Tel.: þ61 431 287 402; fax: þ61 3 5327 9405. E-mail address: [email protected] (P. Effendi). 0960-1481/$ e see front matter Ó 2011 Elsevier Ltd. All rights reserved. doi:10.1016/j.renene.2011.07.039
While this statement is true about the transition barrier in renewable energy, the technical barrier is not the only one [4]. In fact, at the level of the utility and electricity operators, Sovacool [5] finds that inertia comfort makes these operators reluctant to change. It is not about technical difficulties but the way they do their business. The introduction of renewable energy into their system represents large change in procedure, routine and culture in their activity. The other important barrier is economic which is due to market distortion (for example, the presence of subsidy) and externality (for example, the environmental benefits of renewable are not priced). Other barriers include political, financial, social, institutional, cultural and behavioral; for explanation, see [6]. Previous studies have investigated the political side of Australia’s renewable energy, such as Jones [7] from a political administration perspective and it is argued that lack of harmonization between federal and state governments create barriers to the renewable energy diffusion. Saddler et al. [1] and Diesendorf [8] have also argued that social and political barriers are very pervasive in Australia. The political barriers come from the clash of interest from incumbent fossil fuel electricity generators who oppose renewable development [9]. This creates impediment in the market by the existence of fossil fuel subsidy [10] and policy biases favoring the fossil fuel industry [11]. It has also contributed to slow process for developing commitment to form a renewable national target [12]. In the implementation aspect, the political barrier creates policy uncertainty through unusually early evaluation on renewable energy program [13] which affects the disruption in the
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finance of the program [14]. All these studies have highlighted the effect of political barriers and institutions in preventing the formation of renewable energy development support. To the best of the authors’ knowledge, few studies have attempted to explain the antecedent of these political barriers. This paper will contribute to the literature on the political economy barrier to renewable energy by specifically proposing sources of the political barriers and the mechanism by which these sources form political structure for capitalists, that in turn inhibits the development of renewable industry. It will examine Australia’s recent renewable energy development for electricity generation. The aim is to explain why Australia has been prevented from significantly adopting renewable energy despite having huge potential of renewable sources. The Political Aspect of Innovation (PAI) framework developed by Courvisanos [15] will be adopted to examine the causes and barriers that have blocked the taking up of renewable energy. The paper is structured as follows. Section 2 describes problems of renewable energy innovation and its state of play in Australia. Section 3 outlines the PAI approach to renewable energy, while in Section 4 the application of PAI to Australia’s renewable energy is then described. Section 5 concludes the paper by drawing some policy implications. 2. Innovation in renewable energy 2.1. The general problem of innovation in renewable energy In terms of generating electricity, renewable sources represent a radical change from electricity that is mainly generated by fossil fuels. The current energy infrastructure and system are built upon the foundation of fossil fuels energy that utilizes centralized transmission systems where fossil fuel plants are concentrated in particular specific places [4]. Fig. 1 depicts that currently the dominant fuel globally for energy generation comes from fossil fuels, namely coal and gas (62.3%). There are several characteristics that engender problems in renewable energy innovation and development. Firstly, the driver for the change to renewable energy comes from outside the electricity industry. Although some consumers demand green electricity, the genuine driver comes from outside the industry, this being the need to reduce carbon emissions that cause global warming and climate change. This makes transition to renewable energy difficult as the industry is comfortable with fossil fuel already providing cheap to access and very profitable electricity. For example, Table 1 depicts the cost of electricity generation by fuel type in Australia. Secondly, the nature of renewable sources themselves, apart from biomass, is that they are low density, can not be stored easily, and supply is intermittent. Thirdly, the current renewable energy
Fig. 1. World electricity generation by fuel type, 2008. Source [16]: page 24.
Table 1 Comparison of electricity generation costs in 2006e2007. Fuel
Generation cost (Australian $/MWh)
Brown Coal Black Coal Gas (combined cycle) Biomass Wind (on-shore) Geothermal Solar Photovoltaic Solar Thermal
35e40 30e35 38e54 46e80 52e72 70e110 120þ 120e150
Source: [17]
technologies themselves are low efficiency in energy conversion. For example, solar technology can normally convert about 15% of solar energy into electricity while coal and gas with a combined cycle process can achieve around 35% and 50% efficiency respectively [8]. In terms of development, renewable energy technologies are at different stages of commercialization. The most commercially competitive at the moment is wind energy, while solar photovoltaic and thermal energies come after that. While geothermal energy technology utilizing volcanic heat source has reached some level of maturity, geothermal energy that harnesses non-volcanic sources such as hot rock granite and also lower-temperature circulating waters in sedimentary basins is still in developmental stage [18]. Its real commercial cost and viability are still difficult to be determined. The same case also applies to wave and tidal energies since they are currently in the early stage of commercialization [19]. These various different renewable energies and their different commercialization stages mean that renewable energy development still require continuous large funding and need various (and varied) corresponding innovation policies to make them competitively viable vis-à-vis fossil fuels. Another problem facing renewable innovation is the market competition from other types of fossil fuel energy sources such as gas (which has low carbon emissions), clean coal with carbon capture and sequestration, and nuclear energy. Such technologies are highly centralized and can fit into the current transmission system very easily. Yet, in the public agenda, these alternative fossil fuel technologies are positioned as viable alternatives to renewable energy technologies in mitigating the carbon emissions problem [20]. The last problem is that electricity is a huge system represents large inertia that tends to preserve the longevity of fossil fuels [21]. 2.2. The state of renewable energy in Australia Australia has abundant supply of renewable energies such as solar, wind, wave, tidal, biomass and geothermal energy and all of these energies have now being developed in Australia [19,22]. Australia has engaged in research and development (R&D) of solar water heater since early 1950s and became the world leader in this area in the 1960s. Throughout the 1970s Australia developed solar panels for remote area application where there was no electricity available, and in 1985 the first silicon solar cell with 20% efficiency was invented at UNSW [23]. However, since Australian Governments did not provide adequate incentives, this solar technology was taken to China and within a couple of years became one of the largest producers of solar panels in the world [20]. In Australia, the commercialization of renewable energy has not developed in any way close to matching the R&D expertise that has been shown by Australian scientists in solar power. The first serious wave of renewable energy uptake did not start until as late as 1997 when the Howard Government declared Australia’s commitment to
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developing renewable energy as part of its energy plan to reduce carbon emissions [12]. As a result, a market for renewable energy was created by specifying a Mandatory Renewable Energy Target (MRET) in 2001 for which electricity retailers needed to purchase ‘green’ or renewable energy certificates which could be surrendered according to the obligatory amount prescribed to them [12]. The MRET scheme has been successful in attracting green electricity generators, especially those that are of mature technologies such as hydropower, solar panel and water heaters, and wind power [13]. Although the Howard Government decided not to extend the MRET scheme beyond 2010, it was then expanded in August 2009 under the Rudd Government into a new larger Renewable Energy Target (RET) to produce an additional 45,000 GWh of renewable energy per year by 2020, representing 20% of electricity generation. To promote large scale renewable generators, on 24 June 2010, there was an amendment to the RET by differentiating between large scale renewable energy target (LRET) such as wind farms, solar plants and geothermal facilities; and also small scale renewable energy target (SRET) such as solar panels and solar hot water systems [24]. Besides creating a market through renewable energy certificates, Australian governments also supported the commercialization of renewable energy by various other initiatives. A budget of $700 million was invested in R&D and demonstration projects on Low Emissions Technology Fund, Solar City trials, Renewable Energy Development Initiative, Advanced Electricity Storage Technologies, and Wind Forecasting Capability [19]. The Renewable Energy Commercialization Program (RECP) with a budget of $50 million was created to promote renewable technologies such as thermal and solar photovoltaic projects, projects on biomass, landfill, geothermal, wind power, and also complementary systems such as batteries and inverters. To encourage the deployment of solar energy in the households, the government designed the Photovoltaic Rebate Program (PVRP). For the remote areas there was Renewable Remote Power Generation Program (RRPGP) with the goal to replace diesel generators. Small innovative companies were also supported financially by Renewable Energy Equity Fund (REEF) through venture capital [19]. In addition to the Federal Government initiatives described above, a number of states also create programs to increase the contribution from renewable resources. For example, the Victorian Government has created the Energy Smart Business Program and the Renewable Energy Support Fund (RESF) to attain a target that 10% of Victoria’s electricity sourced from renewable sources. Other states such as New South Wales and Queensland also promoted renewable energy but with slightly different programs. Despite all the initiatives above, compared with other developed countries, the proportion of renewable energy in electricity generation in Australia is still very small as evident in Fig. 2. Between 1990 and 2001, Australia only had average growth rate of 4% in contrast to OECD countries’ average rate of 17% [25].
Fig. 2. Electricity generation in Australia, 2007e2008. Source [26]: page 21.
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Comparing Figs. 1 and 2, 93.1% of Australia’s electricity was generated in 2007e08 by fossil fuels, whereas these fuels only contributed 67% of the world’s electricity generation (including less developed economies) in 2006. There are four challenges currently confronting efforts to deploy renewable energy in Australia. The first challenge is Australia’s vast geographic area. This needs an investment in complementary grid and transmission lines. Secondly, a weakly developed market for carbon under the 2009 proposed emission trading scheme (ETS) failed to be implemented and the demand for renewables now relies only on the RET and green voluntary markets. The third challenge is the Australian electricity industry structure which is dominated by fossil fuels that are highly centralized where distributed renewable energy cannot easily be integrated in the existing electricity system. The last challenge is the lack of investment from the private sector, partly due to the current financial crisis. All these challenges pose some serious barriers to the successful deployment of renewable energy in Australia. 3. Political aspect of innovation approach The Political Aspect of Innovation (PAI) framework is conceptualized to understand the role of innovation policy in the public domain as governments now increasingly make innovation the core in policy formulation for economic development. Attention is concentrated on the response of the main economic agents, namely entrepreneurs and capitalists, in reacting to innovation policy put forward by government. The concept is derived from Kalecki’s perception of fear possessed by the capitalists when government implements full employment policy devised to reduce the dangerous effect of the business cycle [27]. Whereas John Maynard Keynes gave the world the theoretical Keynesian tools to combat unemployment, the political economy reality identified by Kalecki [27] is that as the economy reaches a peak in the business cycle, capitalists’ fears of full employment ensure that macroeconomic policies to achieve full and permanent employment are thwarted. As such, Kalecki recognizes the class based nature of public employment policy. Kalecki [27] identified three fears of full employment possessed by the capitalists in this regard. First is the fear of losing economic control. This relates to its market power influence that is diminished by the new firm entry to their industry to chase profits as government puts more financial incentives to the industry to boost employment. Second is the fear of losing policy control. This relates to public investment spending extending the power of the state over the role of capitalists in making the investment decisions. Fear arises because capitalists reduce their investment spending as industry profits begin to slow down at the peak of the cycle, while at the same time government continues to induce further new public investment. Third is fear of losing industrial control links to labor relations in the industry. Capitalists recognize and ‘fear’ that it is more difficult to exert influence over labor power as unions and employees become strong and emboldened by expectations in the maintenance of full employment. PAI is also based on class analysis that applies these same three fears, but this time in relation to innovation and not to employment. Rothbarth [28] argues that uncertainty created by the innovation process leads to strong dependence of physical investment (whether by equity funds or by leverage with debt funds) on current profits. To Rothbarth, it is this argument which connects Schumpeter’s innovation to the work of Kalecki on investment. Synthesis between Schumpeter and Kalecki, identified by Rothbarth, provides the starting point for the PAI critique of the role of innovation and public innovation policy in the current situation where there is a struggle between the monopoly power enshrined
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in evasive carbon polluting innovation, and the emerging transformative power of new radical eco-sustainable technologies. The PAI analysis relates to innovation activity enshrined by uncertainty that is induced by government policy, bringing new products or services into the marketplace that impact on the industry where the incumbent capitalists have controlling power [15]. The effect of this uncertainty and public innovation policy to the capitalists will be the three fears. One is the loss of capitalist’s economic power as new innovative capitalists enter into the market, reducing the market share of the incumbent capitalists. The second fear is the loss of policy control relating to more public investment being directed toward new innovation and endorsed by government (sometimes referred to as ‘picking winners’). Thus, this loss of policy power fear exists as the new investment undermines the incumbent capitalist to influence the business decision in the industry by their own means of investment endeavor. The third fear of loss of industrial power also develops as labor (and thus employees) becomes more secure under innovation-supported industries, which leads to stronger industrial bargaining power (whether as individuals or part of unions). The PAI approach also recognizes that in this third fear is the issue of power balance between factions of capital; where, for example, innovation-based expansion by industrial capitalists loses out to speculative-based financial capitalists during financial booms. From this concept, Courvisanos [15] then identifies the consequences of these fears to the innovation venture initiated by the government’s innovation policy. The incumbent capitalists try to capture the opportunity from the innovation policy by diverting it to extend their industry dominance which currently in their control. This creates what Courvisanos [15] calls evasive innovation. By the same token, this type of innovation may inhibit radical or transformative innovation that the original policy intends to generate in the first place. This PAI framework is useful in enriching our understanding on how an innovation policy can fail to materialize its goal. The political economy angle of this concept is expected to contribute to the literature on the important effect of political structures and institutions in promoting a new transformative economic development. The framework can be especially helpful in answering why during the peak of a business cycle it is difficult to introduce such economic transformation. It is usually during recession times that transformation is likely to occur, since numerous means of production are idle due to low economic demand. With the help of government’s innovation policy, the incumbent capitalists then will have less to fear and can be more easily persuaded to replace their capital goods with innovationembedded new capital goods [15]. This framework is also useful to inform the mechanism through which the political process affects the transition to a sustainable economic future. As many people increasingly feel the effect of global warming and climate change, it is imperative to adopt a sustainable development paradigm in pursuing economic growth and sustaining the quality of life. In the domain of securing energy needs, this sustainable paradigm necessitates the adoption and development of renewable energy [8]. In the next section the PAI framework will be applied to the development of renewable energy in Australia as a transformational innovation.
4.1. Economic power From the context of the technology of energy production, economic power is in the hands of the electricity generation industry. The electricity generation industry that feeds on to the national grid in Australia is currently heavily dominated by fossil fuels. The abundant cheap supply of brown and black coal means Australia is endowed with a stable and low electricity price. This in turn promotes the development of emissions-intensive industries that use an enormous amount of electricity in their production; e.g. aluminum, steel and liquefied natural gas (LNG). High overseas demand for the output of these trade-exposed emissions-intensive industries has made them main contributors to export income and government revenue [25]. This leads back to the effort to expand the electricity industry and in this way a fossil fuel positive feedback loop is created. All this makes the incumbent fossil fuel electricity generation industry hugely economically powerful as it is intricately linked to traditional employment-based commodities and manufacturing sectors. It is important to appreciate that this engenders structural inertia and amplifies other barriers such as lack of financial support, lack of regulatory framework, lack of R&D culture, lack of involvement of stakeholders in decision-making and also market distortions such as subsidies. This fossil fuel electricity generation scenario creates substantial barriers for renewable energy which then results in only small niche off grid renewable energy applications in the remote areas that are successful mainly due to government subsidy [29]. In the energy sector, Australia also has made itself a leader in energy export. The high demand and large contracts for fossil fuels has made Australia increase its energy export earnings by 66% to $78 billion in 2008e2009 [26]. The importance of energy exports within Australia’s commodity export earnings is evident in Fig. 3, while Fig. 4 shows the enormous growth of these exports over 30 years since 1980. The economic and trade structures created by the fossil fuel energy resources gave rise to a major obstruction for development of renewable energy resources [25]. The global economic boom through the first decade of the 21st Century gave these structures
4. The application of PAI to Australia’s renewable energy development Application of PAI requires separate analysis of the three capitalists’ fears under uncertainty that engender the barriers to renewable energy e economic power, policy control and industrial power.
Fig. 3. Major Australian commodity exports. Source [26]: page 3.
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Fig. 4. Australian energy exports 1980e2009. Source [26]: page 2.
a sense of solidity which was not disturbed by recent global economic events. The global financial crisis which started around the middle of 2008 apparently did not substantially affect the Australian economy. Since April 2009, there have been price increases in most of Australia’s resource commodities that reflects the strong growth of China [26] after its own massive public stimulus prevented significant economic downturn. This resource boom has resulted in extension of the long business cycle expansion in Australia. In these circumstances, the PAI predicts that the development of renewable energy that represents a sustainable innovation will be hindered. The incumbent resources-based and emissions-intensive capitalists will pursue evasive innovation to take advantage of the effective Australian Government stimuli introduced to prevent recession, thus capturing all the benefits and hindering further transformative innovation through renewable energy.
4.2. Policy control Policy control is also a driver of incumbent power. There has been very strong political opposition in Australia in any public policy attempt to stop the use of coal so as to reduce carbon emissions [9]. This is in strong resonance with the position taken by the Federal Labor Government, expressed by Energy Minister Martin Ferguson who sees carbon capture and sequestration as important in extending the viability of coal industry. This support for fossil fuels and modest gestures to renewable development is argued by Falk and Settle [9] as politically acceptable while lessening the government effort to reduce energy consumption. This is reinforced by the lack of vision of the leadership shown by former Prime Minister John Howard and his conservative government during its eleven year reign until late 2007. This political alliance between incumbent fossil fuel industries and the conservative Howard Government made for a relaxed approach to energy policy that is consistent with the use of fossil fuels in electricity generation [25]. The actions of the Labor Government with Energy Minister Ferguson since late 2007 have reinforced this approach [30]. In this policy scenario, evasive innovation takes the form of maintaining the status quo of public subsidies and incentives that are enjoyed by the fossil fuel industries. This stems from vested interest in the big resource industries and their influence. The large profits that are accumulated from this business area is then invested in extending the life of the industry by inventing and commercializing technologies that support their technology system such as cogeneration, combined cycle, carbon capture and sequestration (CCS). Power influence of the incumbent industry appears in at least two forms. First form relates to the physical and financial resources
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taken away from renewable energy sector. These resources dominantly captured by the incumbents include public subsidies, R&D funds and institutions, financial infrastructure, and so on. In terms of subsidy, according to Riedy [10], it is estimated that the subsidy to the energy sector amounts to $10 billion annually which mostly goes to the fossil fuel sectors while only 4% in 2005-06 went to support renewable and energy efficiency. Diesendorf [8] estimated that this subsidy consists of an amount of $6.5 billion per year to support the use of fossil fuel and its ‘corresponding vehicles’. In development and deployment arrangements, the Australian Coal Association, for example, has asked the federal government to support their project on CCS by requiring more funds and extend further the implementation time of CCS [31]. Thus, most of the carbon emissions reduction funds were used for clean coal and other low-emission technologies and not renewable energy [19]. As a result, there was less financial support for renewable energy development both in research and demonstration, as well as in technology deployment [22]. Lobby from powerful industry takes place in limiting the integration of renewable electricity to the grid and the lessening of the efficiency standards in the building code [8]. Thus, there is less financial support for renewable energy development both in research and demonstration, as well as in technology deployment [22]. As an example of the impact of this lobbying, photovoltaic technology commercialization in Australia ran on a low budget, by the world standard [32]. Most renewable energy commercialization funding was directed to developing clean coal and other low-emission technologies [33]. In this context, the R&D business spending (and the subsidies and tax concessions from the public purse) is basically dominated by the fossil fuel sector, as can be seen in Fig. 5. Powerful lobbying also takes place between individuals that form coalitions between stakeholders in supporting the fossil fuel energy industry. The closeness of CSIRO and BHP Billiton in promoting and doing common research is an example [34]. The second form of power influence is the institutional circumstance in which reducing carbon emissions legislation is designed so that regulatory framework and social conditions are not beneficial for renewable energy development. This regulatory framework and institutional conditions include the policy environment, regulation alignment, routines and procedures. In the end, this creates uncertainty for all stakeholders in investing for renewable energy [14]. Nill and Kemp [35] show how such economic uncertainty in the political context provides what they call ‘policy constraints’ to sustainable innovation policies. Further, uncertain political mood in federal government has also shackled a favorable environment for renewable investment that the MRET program intended to make [13]. In 2002, the Parer Review was conducted only two years after the MRET was implemented; whereas usually most new legislative acts are reviewed after five years in operation [7]. This review mainly recommended that the MRET should not be continued as this measure was an expensive way to combat global warming. It recommended instead the implementation of an emission trading scheme. Later on in 2003 another review called the Tambling Review was commissioned to examine the MRET. Contrary to the previous review, it recommended the extension and expansion of the MRET as this measure’s purpose was to build a new renewable industry, not just mitigating carbon emission per se [7]. The then Prime Minister John Howard used these two review to reject the extension, let alone expansion, of MRET with the argument that this is an expensive item for the government budget and that by this measure, the government is picking winners, i.e. renewable energy [7]. To demonstrate the powerful lobby of the incumbent industry, Kent and Mercer [12] documented that the 2% target in the MRET program was the result of a long debate that was won by the
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Fig. 5. Australian business R&D by objective, 2007e2008. Source [26]: page 70.
energy-intensive industry with a percentage which was within their comfort zone but too low as a target to overcome commercialization barriers. The target in percentage was deliberate as the electricity consumption grew, 2% target at 2001 would be 0% at 2010 [12]. The target was then reached four years earlier than intended due to strong industry growth [13]. RET design was also ill structured to generate large scale deployment of renewable energy, since it included solar and heat pump hot water system. Even waste coal mine gas was also included that could act as subsidy to the coal industry [14]. The decision not to extend the MRET by the Howard Government and the attainment of the 9500 GWh target created political and investment uncertainty. Investment in renewable energy was declining. The Howard Government also closed its Cooperative Research Centre for Renewable Energy (CRC-RE) [36]. Later on in 2004, the energy white paper was published by the Howard Government that marked the end of direct renewable energy industry support. In the white paper, government measures were directed toward R&D and commercialization of various technologies that were considered to have potential for reducing emissions. The Howard Government made a strong commitment to other ‘clean’ technology, notably clean coal with carbon capture and sequestration which took $500 million out of the $700 million of the budgeted commercialization fund [19]. Although these new measures are market friendly, Sonneborn [37] argues that market based approach is unlikely to be successful if it is not accompanied with complementary regulatory or target-oriented policies and programs. Emphasis on market based only results in inconsistent support that will not be beneficial to renewable energy development. This is because the energy market is distorted by subsidy support for the incumbent industry, and suffers from externalities and unfavorable climate for distributed power generation [37]. As a result, the lack of coherence in renewable policies and the prevailing old regulatory regimes inhibit the formation of a strong ‘renewables coalition’. In Australia, the fossil fuel coalition seems to exert more influence than its renewable energy counterpart [11]. The formation of national electricity market (NEM) that connects almost 90% of consumers in Australia by privatization and market reform can be viewed as the way the incumbent industry manages to prolong their predominance. This is because the main purpose of NEM is to create efficient markets and lower electricity prices. Only big incumbent generators and utilities can take advantage of this reform due to the large capital they possess. Most renewable energy generators usually are small firms and are prevented from taking advantage of such benefits. However, Jones [7] maintains that the Howard Government reforms made the connection of renewable energy to the national grid possible. With the simplified procedures, generators can start supplying electricity
to the grid as long as they can secure a contract agreement with the retailers who buy the electricity for a certain period of time and secure necessary capitals from financial institutions. However, the downside of this reform is that the costs of grid connection, and also transmission augmentation and reinforcement are still to be paid by the renewable generators. In addition, in terms of regulation, favorable standards and codes for integrating renewable energy into the grid are still in their infancy [38]. From the above pattern identified, if there are any policies about to be implemented to promote renewable energy such as carbon price and RET, these policies will be opposed by powerful incumbents arguing that such policies will harm their industry. The reason that the incumbents use in promoting their cause is that any increase in electricity price would drive down this industry’s competitiveness in the international market [26]. The final impact of this evasive innovation is the low take up of renewable which in turn also means that economies of scale and learning are limited [39]. Following this, technical barriers are at work. To overcome the barriers, more investment in R&D and also in demonstration projects is required to create positive feedback for renewable energy [22]. However, the low take up means only a small local market is developed and a negative feedback occurs as shown in Fig. 6. In the case of photovoltaic, for example, it is difficult for the existing manufacturer, BP Solar, to stay in production with 70% of its product already for the overseas market [32]. Nevertheless photovoltaic rebate in 2000 was very successful in attracting the on-grid application of photovoltaic panels at residential houses. Before the rebate, the panels were only used in remote off grid applications [32]. Investment is crucial in renewable energy to alleviate the intermittency problem of some renewable sources such as wind energy by developing storage and also wind forecast technologies [22].
Fig. 6. Detrimental negative feedback for renewable energy.
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The prevailing domination of the incumbent fossil fuel electricity generation industry in Australia is so conspicuous that Schlapfer [11] argues there is a concealed partiality in Australia’s energy policy favoring fossil fuels. It shows double standards. When it comes to renewable energy with its intermittency and storage problem, the Australian Government argues that the challenges are enormous, but when it is about ‘clean coal’ with CCS technology, the government says it is just a matter of time to achieve it [11]. Recent studies show that CCS will not be commercially available until at least 2020 [8]. 4.3. Industrial power The third PAI fear is driven by industrial power. This is a complex element made up of union/employee relations and fractions of capital relations. Influence of the unions in Australia presents as a manifestation of fear of losing industrial control as happened in the battle over interests between plantation industry and natural forest logging industry [30]. In general, as more employment is created in the renewable sectors (see Table 2), there is fear of losing influence over the labor resource by the incumbent industry since labor can move out to the renewable sectors. Based on the review of 13 studies, Kammen et al. [40] show that the renewable sector can create significant large employment. In terms of per unit of energy delivered (megawatt), it can employ more people than the fossil fuel sector. In this context of loss of jobs, there is a long history in Australia of union collaboration with incumbent emissions-intensive industries to protect jobs against the environment, notably in forestry with a ‘rearguard action’ to preserve native forest logging as detailed by Ajani [41]. When dominant industries are being threatened through innovation, they engage in an industrial alliance to protect profits and jobs against the potential of new jobs in sustainable green industries of the future. Energy Minister Ferguson comes from a strong traditional industrial unionist background that ensures support for the dominant non-renewable electricity industry. This creates a wedge between fractions of capital, with innovative green capitalists being marginalized both from the capitalist perspective (with great difficulties in obtaining finance and other resources) and from a public policy perspective (with public innovation support for the evasive innovation of the dominant fraction of capital). The fractions of capital have splintered and widened after the August 2010 national elections in which the Labor Government required the alliance of regional independents and The Greens party to secure a second term. This has created great uncertainty, especially with The Greens party gaining the balance of power in the Upper House of the bicameral parliamentary system. This has created more fear of the loss of industrial control by the dominant fossil fuel industry which has splintered perceived unity. BHP Billiton CEO, Marius Kloppers came out in a major speech on 15 Table 2 Australian employment for different types of base-load power stations. Power station (Name)
Description
Australian content (% of Cost)
Tarong North
Coal fired, rated 450 MW Wind farm, rated 21.6 MW Cogeneration,rated 30 MW Fuel: bagasse & sawmill waste
26
49
44
120
50
220
Albany Wind Farm Rocky Point
Source: [42]
Total Australian employment (job-yr/TWh)
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September 2010 for Australia to embrace a carbon price urgently and ahead of any global agreement [43]. This seemed counterintuitive for a fossil fuel sector that had supported the ‘no carbon price’ position of the opposition conservative party. However, with many broad commercial interests, including uranium and LNG, BHP sees the Greens as having the political power to push radical carbon price and green industry support polices that would transform Australia significantly away from fossil fuel trade and energy. Better, BHP judges, to put on the agenda a ‘mosaic of initiatives’ that would provide a fossil fuel ‘trade-friendly’ carbon price regime with rebates of emissions costs for trade-exposed industries [44]. BHP can see a benefit over other fossil fuel companies in this more complex evasive innovation support scheme. Not surprisingly, other factions of the fossil fuel sector that are less trade-exposed and have the ‘dirtiest’ carbon emitting electricity power plants (like brown coal Hazelwood power plant in Victoria) see the BHP agenda as a threat to their existence. Thus, in the context of Kloppers’ speech, capital has split in two. The Australian Chamber of Commerce & Industry (constituency: small-to-medium capitalists) and the National Farmers’ Federation (constituency: agrarian capitalists) e along with the conservative business-oriented major opposition e are against any carbon pricing policy. Aligned in favor along with BHP Billiton are The Business Council of Australia (constituency: larger capitalists) and the Australian Industry Group (constituency: broad business representation, including innovative sustainable capitalists). The PAI struggle for industrial power by workers and capitalists in established unsustainable industries to defend evasive innovation against the rise of transformative sustainable innovation is bound to result in delays toward renewable energy that could leave Australia on the ‘tail end’ of the changes globally to a green future. 5. Some implications and concluding remarks This paper has attempted to demonstrate that PAI is useful in understanding the political economy dimension of the barriers that prevent the introduction of renewable energy. As such, the PAI analysis can be used to explain the delay and slow growth of renewable energy in Australia. The PAI analytical framework can inform the public innovation policy in Australia and the way it aims to encourage and support investment for energy producers by paying attention to the role of powerful lobby from the incumbent industry. The usefulness of this framework manifests in the distinction between evasive innovation which favors incumbency, in this case the fossil fuel industry; rather than the renewable energy industry which engenders transformative innovation. From this perspective, the political barriers identified in the PAI analysis places the technical problems to renewable energy in a sharper and clearer focus. The powerful incumbents argue that transition to renewable energy is a difficult technical matter due to such supply problems like lumpiness of construction and intermittent power into a centralized grid. What the PAI analysis does is expose such arguments as camouflage in their attempts to maintain economic and political power. From a community-based ecologically sustainable position, it can be argued that technical solutions to the supply problems such as decentralization through ‘renewables’ would help to overcome lumpiness of supply construction and also allow for the development of effective storage and wind forecast technologies to solve the intermittent nature of renewable energy. Resolution of the political and economic debate on sustainable development in general and renewable energy in particular, is a long way away. Thus in practice, the development of renewable energy cannot be left to the mercy of ‘market forces’ e re: incumbent power e alone. To overcome the barriers of renewable energy,
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comprehensive measures need to be taken that include among others, the phasing out fossil fuel subsidies, feed-in-tariff, and correct electricity pricing [45]. For Australia, despite the various ranges of measures introduced (RET, Feed-in-Tariff), Buckman and Diesendorf [17] find that due to policy design limitations, these measures will not achieve the 2020 target to have 20% electricity from renewable energy. Due to quick economic recovery out of the global financial crisis in Australia through strong effective public sector stimuli domestically and in China, the PAI approach recognizes that the commodity based export boom has continued Australia’s ‘Lucky Country’ mentality. This prevents any major consideration of the need for a paradigm shift in Australia’s economic direction, and delaying further consideration of a transformation to sustainable development using the renewable energy resources naturally endowed to this nation. There are two transition paths to a sustainable renewable energy future. The draconian one arises from the barriers identified in the PAI analysis above. This is based on waiting for a major economic depression forcing sudden and debilitating structural change as coal demand peaks with the world moving exorable to a fossil fuel free economy and Australia is left well behind in the transformation. The affirmative transition path is immediate resolution of the PAI conflicts through planned restructuring using an eco-sustainable policy framework as outlined in Courvisanos [46] which rejects the negative feedback of the current evasive innovation position so clearly identified by the PAI analysis in this paper. Acknowledgments The authors thank the participants for their constructive comments and valuable inputs at two conferences: the 2010 “Spirit of Innovation IV” Forum: Environment, Innovation and Sustainable Development, 7e8 October 2010 Euromed Management School, Marseille and the Ninth Society of Heterodox Economists Conference, 6e7 December 2010,University of New South Wales, Sydney. References [1] Saddler H, Diesendorf M, Dennis R. A clean energy future for Australia. Sydney: Clean Energy Future Group; 2004. [2] Wright M, Hearps P. Australian sustainable energy e zero carbon australia stationary energy plan. Melbourne: University of Melbourne; 2010. [3] Dopita M, Williamson R. Australia’s renewable energy future. Canberra: Australian Academy of Science; 2009. p. 2. [4] Unruh GC. Understanding carbon lock-in. Energy Policy 2000;28(12):817e30. [5] Sovacool BK. The intermittency of wind, solar and renewable electricity generators: technical barrier or rhetorical excuse? Utilities Policy 2009; 17(3e4):288e96. [6] Painuly JP. Barriers to renewable energy penetration: a framework for analysis. Renewable Energy 2001;24(1):73e89. [7] Jones S. The future of renewable energy in Australia: a test for cooperative federalism? Australian Journal of Public Administration 2009;68(1):1e20. [8] Diesendorf M. Greenhouse solutions with sustainable energy. Sydney: UNSW Press; 2007. [9] Falk J, Settle D. Australia: approaching an energy crossroads. Energy Policy; 2010. doi:10.1016/j.enpol.2009.12.028. [10] Riedy C. Energy and Transport Subsidies in Australia: 2007 Update, prepared for Greenpeace Australia Pacific. Sydney: Institute for Sustainable Futures; 2007. [11] Schlapfer A. Hidden biases in Australian energy policy. Renewable Energy 2009;34(2):456e60. [12] Kent A, Mercer D. Australia’s Mandatory renewable energy target (MRET): an assessment. Energy Policy 2006;34(9):1046e62. [13] Kann S. Overcoming barriers to wind project finance in Australia. Energy Policy 2009;37(8):3139e48.
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