Economic Theories and Concept - Assignment

Running Head: ECONOMICS ASSIGNMENT
Economics Assignment
Name of the Student
Name of the University
Course ID

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Table of Contents
Introduction......................................................................................................................................2
Brief summary of the article............................................................................................................2
Article evaluation; economic theories and concept.........................................................................3
Recommendation.............................................................................................................................5
Conclusion.......................................................................................................................................6
List of references.............................................................................................................................7

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Introduction
Australia has put continuous effort to increase the use of renewable energy sources to
generate electricity. Australia aims to replace power generated from coal and gas fired station
with power plants fueled by renewable energy sources. Wind, solar, hydro, geothermal, landfill
gases are some of the commonly used renewable energy sources. Australia has recorded a
gradual increase in renewable energy consumption which has increased from 5.9% in 2011-12 to
5.9% in 2015 and now is has become a double digit figure (arena.gov.au 2018). Transition to
renewable energy source though initially face trouble but now the nation has made considerable
progress and has potential for further improvement.
Brief summary of the article
The article reported that that renewable power sources in Australia is able to meet 90% of
power demand in the nation. If the solar and wind projects initiated in the last year are completed
then the power demand can be met using renewable sources. In the last year, the renewable
energy sector was far from meeting the consumption demand. The renewable energy sources in
the last year could generate electricity enough to meet 70% of household demand. The
Renewable energy index in recent years has found that there if all the solar and wind projects
have completed then their power generation will be enough to meet 90% of power demand
(theguardian.com 2018).
The renewable energy has shown sufficient advances despite of country’s dependency on
carbon and gas-fired station to meet electricity demand. The share of renewables in power
generation has now increased to 18.8% as against only 7% in the last decade. The increasing
share of renewables helps the nation to reduce carbon emission. Hydro-electricity is the biggest

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source of renewable energy with a share of 40%. The next two positions are hold by wind with a
share of 31% and rooftop solar with a share of 18%. For solar energy, the contribution of large
solar firms is 2%. This leaves room for improvement in solar powers (Twidell and Weir 2015).
Large scale projects have been initiated to explore solar energy. The expansion of renewable
energy sources help to boost construction jobs and investment.
After a period of lack insufficient investment, the renewable energy sector has now
recorded a considerable recovery. In response to a set of government initiatives, the confidence
of investors have regained. The renewable energy sector is now on the path of fulfilling
renewable energy target by 2018 (theguardian.com 2018). Without support from government,
investment beyond the targeted level has the risk of collapsing.
Article evaluation; economic theories and concept
The extensive use of coal or gas generated power plants lead to high pollution resulted
from large scale emission. The advanced nations in order to reduce emission sets the target for
achieving a clean energy goal (Azad 2014). The alternative to traditional energy is the use of
renewable energy sources. In order to fulfill clean energy target Australia needs to make rapid
transformation in the energy sector. This initially comes with a great challenge for every aspect
of the concerned sector. The problem extends from production, proper transmission, distribution
to consumption and export of energies (theconversation.com 2018). The objective was to make a
shift towards low carbon emission while also addressing the issue of high price. Despite several
steps taken by the government, the renewable power plants fail to generate powers sufficient to
meet household and industries demand.

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In the last year power generated from renewable sources could possibly meet 70 percent
of the power demand. Based upon increasing prospects of investment and completion of
undertaken projects, the capacity of renewable energy has increased significantly. The renewable
energy sources now expected to meet nearly 90% of total demand. There is considerable
advancement in renewable energy market. Supply of a good or service is dependent on a number
of different factors (Mankiw 2016). Lack of investment was the major factor that dragged the
renewable energy market of Australia. Investment was dried up completely under the regulation
of former Prime Minister Tony Abbott. The investors gained their confidence under Malcolm
Turnbull. State government has undertaken a number of policy initiatives. In response to these
initiatives taken by government investment rose significantly and now Australia is set on the path
of meeting its emission target by 2018 (theguardian.com 2018).
Figure 1: Effect of increased energy supply on price
(Source: as created by Author)

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The direct consequence of an increased supply is on the price of electricity (Lee 2018).
The increased power support from renewable energy sector especially development of solar
system is expected to help household to save power bills by $1.5 billion.
Figure 1: Renewable power projects and increase in employment
(Source: as created by Author)
Expansion of renewable energy has a positive effect influence in terms of creation of new
job opportunities. Nearly 8,868 people are employed in completing large scale projects which are
under construction. The figure increased to 10,000 in July. Most of these jobs were concentrated
in New South Wales especially in wind farms (Azad et al. 2014). For Queensland most of the
jobs are created from Solar projects.
Recommendation
Renewable energy sources though marked significant progress in recent years but there
are still more to go. The complete transformation to renewable energy source needs more
investment. The undertaken projects are expected to meet 90% of energy demand. Achievement

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of this target needs successful completion of all the initiated projects. Government should take
initiatives such that no interruption can occur in completion of the projects.
Most household in Australia are demanding solar panel on their rooftop. To meet the
growing demand for solar power more solar project especially the large scale ones needs to be
undertaken.
Conclusion
The increased investment in renewable energy sources help Australia to fulfill its clean
energy target. Recover of investor confidence following measures undertaken by the state
government is the main driver of increased capacity of renewable power plants. The major
renewable sources include hydro-electricity, wind power and solar energy. The several projects
undertaken in renewable sector creates various new jobs. In the wind farms of NSW several
people get employed and the number is expected to increase. Several jobs have also been created
in renewable projects undertaken in solar farms. By installation of solar system household are
expected to experience a saving of around $1.5 billion in their electricity bills.

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List of references
Australian Renewable Energy Agency. (2018). What is renewable energy - Australian
Renewable Energy Agency (ARENA). [online] Available at: https://arena.gov.au/about/what-is-
renewable-energy/ [Accessed 2 May 2018].
Azad, A.K., Khan, M.M.K., Ahasan, T. and Ahmed, S.F., 2014. Energy scenario: production,
consumption and prospect of renewable energy in Australia. Journal of Power and Energy
Engineering, 2(04), p.19.
Azad, A.K., Rasul, M.G., Khan, M.M.K., Omri, A., Bhuiya, M.M.K. and Hazrat, M.A., 2014.
Modelling of renewable energy economy in Australia. Energy Procedia, 61, pp.1902-1906.
Lee, C., 2018. Renewable Energy for Australia: Reducing Canberra's Carbon Footprint. The
UNSW Canberra at ADFA Journal of Undergraduate Engineering Research, 9(1).
Mankiw, N.G., 2016. Economics-Microeconomics-Principles of Microeconomics.
Robertson, J. (2018). Renewable energy generates enough power to run 70% of Australian
homes. [online] the Guardian. Available at:
https://www.theguardian.com/environment/2017/aug/27/renewable-energy-generates-enough-
power-to-run-70-of-australian-homes [Accessed 2 May 2018].
The Conversation. (2018). Australia's energy sector is in critical need of reform. [online]
Available at: https://theconversation.com/australias-energy-sector-is-in-critical-need-of-reform-
61802 [Accessed 2 May 2018].
Twidell, J. and Weir, T., 2015. Renewable energy resources. Routledge.