How an ETS helps build renewable energy
Did you know that around the globe investment in renewable energy has gathered significant momentum, reaching almost $250 billion in 2011?
In fact, last year more money was invested in new renewable power than in high-polluting energy, like coal.
The top five countries for total investment in renewable energy in 2011 were China, United States, Germany, Italy and India.
Luckily Australia is blessed with an abundance of clean renewable energy resources, such as solar, wind, wave and geothermal, which will help Australia to cut its carbon pollution. We have the skills and know how to make this a reality, and create thousands of jobs.
In Australia we already have:
- More than 1 million houses now having solar panels.
- In South Australia, wind and solar energy delivers almost one third of the state’s energy needs.
- Many regional communities now investing in community owned wind and solar projects.
- Since Australia’s emission trading scheme (ETS) began on 1 July 2012, renewable energy generation has increased by 30% and electricity from brown coal has decreased by 12%.
An ETS, which puts a price and limit on carbon pollution, will continue to support the transition to renewable energy in Australia in two ways:
- The price on carbon pollution reduces the cost of renewables vs. fossil fuels and improves the profitability of renewable projects.
Under an ETS, polluting carbon is no longer free, so fossil fuel energy generation, like coal-fired power, becomes more expensive, and carbon-free renewable energy becomes comparatively cheaper. So when investors look to build the next power plant, they are more likely to invest in cleaner power like wind because every year coal will become more and more expensive.
And in the early years while the price on pollution is low, the Renewable Energy Target (RET) adds additional financial support to help build renewable projects now.
- The ETS raises revenue that can be invested in renewable energy projects.
A large part of the money raised from polluters by the ETS is being used to provide grants and loans to renewable projects around the country.
So far nine projects have been invested in, including a large scale solar energy power station in Moree, through the Clean Energy Finance Corporation (CEFC). The CEFC is providing $10 billion in finance to renewable energy, energy efficiency and low emissions technologies.
And over 640 businesses have received financial support to implement energy efficiency or clean technology measures.