Analysis of Contemporary Issues in Australian Renewable Energy Sector

This report analyzes the current state of the renewable energy sector in Australia, focusing on contemporary legal, business, and personal perspectives. It examines the Renewable Energy Target (RET) scheme, the National Electricity Market (NEM), and the role of the Australian Renewable Energy Agency (ARENA). The report discusses legal frameworks, business challenges, and personal impacts related to renewable energy sources such as solar, wind, and hydro. It explores issues like the integration of renewable energy into the grid, government policies, and the transition towards a lower emissions economy. The report also highlights challenges such as the discontinuous nature of renewable sources and the need for market restructuring to facilitate their integration, while also considering the National Energy Guarantee (NEG). The analysis includes potential amendments in the ARENA Act and the Renewable Energy (Electricity) Amendment Bill 2015, offering a comprehensive overview of the renewable energy landscape in Australia and its future trajectory.

Contemporary Business Law

Contents
Introduction......................................................................................................................................3
Contemporary issue from legal perspective....................................................................................3
Contemporary issue from business perspective...............................................................................5
Contemporary issue from personal perspective...............................................................................6
Conclusion.......................................................................................................................................8
References........................................................................................................................................8

Introduction
The energy and resources market of Australia has undergone significant changes in the last few
years and the country is emphasizing on construction of renewable and various other new energy
infrastructure. The renewable generation has increased by 12% in last two years majorly due to
growth in hydropower. Renewables accounted for 16% of the total generation in 2016 in
Australia(Ashurst 2015). As the country is transitioning towards lower emissions economy and
future government policies are likely to support investment in renewables, increase in the
investments in renewable energy sector is expected. The exiting Renewable Energy Target
(RET) scheme aims to generate 20% of the energy of Australia through renewable sources till
2020. RET should continue its functioning with the Clean Energy Target operating together with
it as a supplementary policy, which demands electricity companies to provide a pre-established
amount of power through low-emission sources or renewables(Global Legal Insights 2018).
The Australian Renewable Energy Agency (ARENA) was established in 2012 under the ARENA
Act 2011 with an objective to improve the effectiveness of the renewable energy technologies as
well as increasing the supply of renewable energy in Australia. The funds of around $2bn has
been raised by ARENA for the purpose of enabling the commercialization of renewable energy
projects till 2022.
Contemporary issue from legal perspective
From the legal point of view, the renewable energy laws in Australia are highly sustainable for
the flourishing of renewable energy sector. The Clean Energy Regulator administers the
administration of the large scale RET and the small scale Renewable Energy Scheme so as to
boost supplementary generation of the electricity through the renewable energy sources
(Commonwealth of Australia 2018). In addition, the RET legislation provides an encouragement

for the investment in the renewable energy power stations as well as smaller systems whereas
ensuring the energy sources utilized are ecologically sustainable(Clean Energy Regulator 2017).
In 2015, the government of Australia established on reforms to the RET ensuing careful
consideration.The target for large-scale renewable energy generation of 33,000 GWh till2020
accounts for about 23.5% of electricity generation of Australia till 2020 through renewable
sources. In order to ensure certainty and growth for renewable energy in the country,
amendments in the legislation for the purpose of applying the reforms of government to the RET
was approved by the Parliament in 2015(Department of the Environment and Energy 2015).The
set of reforms included themeasures to provide certainty to the industry, encourage
additionalventures in the renewable energy sectoras well as to redirect improved market
conditions.
Under the National Electricity Market (NEM), the electricity generated by the registered
generators need to be sold through a compulsory pool arrangement, which is managed and
controlled by the Australian Energy Market Operator (AEMO). The generators need to
surrender to the rates at which they desire to sell their energy throughout the group and AEMO
evaluates these proposals in relation to the demand in order to regulate the regional
clearancerates. The NEM in Australia is an ‘energy-only’ market in which electricity generators
are paid for the production of energy and not for the capacity. The participation of renewable
energy generators in the market and sharing the similar customer base as non-renewable energy
sources is creating an issue. As the contribution of renewable machineries to the energy
combinationof Australia is continuouslygrowing, this integration creates challenges to the power
system as well as the NEM in its existing form(Byrnes & Brown, 2018). The Australian
electricity market is already regulated by the Australian Energy Market Commission (AEMC),

the Australian Energy Regulator (AER), and the Council of Australian Governments (COAG)
Energy Council.The clarity regarding the National Energy Guarantee (NEG) of the Federal
Government is a challenge as NEG is a new policy announced in response to the future security
of NEM. The NEG constitutes of two parts i.e. reliability guarantee and emissions guarantee. It
is recommended that that emissions from electricity generation are required to contribute
proportionately to 26 to 28% Paris emission reduction target of Australia to be reached till
2030(McCullough Robertson 2017).
Contemporary issue from business perspective
In order toaddress long- decayed energy policy issues as well as to prevent the outdated energy
market model from falling apart, there is a requirement to provide affordable, reliable, and low-
carbon energy services to the households as well as businesses as well as to develop sustainable
energy export sector. However, “contracts for difference” auction approach towards renewables
has reduced the risk for the project supporters while distributingnon-expensive renewable energy
projects along with ambitious climate targets. The challenge among the ministers is that the
nature of the energy sector has transformed from centralized, top-down, slowly changing system
with the dominance of big businesses, governments, and huge investments to a disordered,
diverse, and decentralized and rapidly changing system(Clean Energy Regulator 2016). The state
governments could be brought into systematic consideration, the private sector, households and
local governments pursue their own agendas and competitive democracy is functional. Thus,
there is a requirement of redesigning and operations of the energy markets so that government
could emphasize on reliability, consumer rights, energy security, as well as on providing fair
accessibility to the emerging business competitions in balance with higher
expectations(Institution of Engineers Australia 2017).

Furthermore, the Federal Government and Labor opposition have carried out a bipartisan deal to
decrease large- scale RET of Australia from the existing target of 41,000 GWh to 33,000 GWh
till 2020. To achieve this, the Renewable Energy (Electricity) Amendment Bill 2015 was
scheduled in Parliament and number of changes to the Renewable Energy (Electricity) Act
2000(Cth) (REE Act) were proposed(Parliament of Australia 2017). The Bill amends the REE
Act as well as the Renewable Energy (Electricity) Regulations 2001 (REE Regulations) and
createssignificant amendments to the Climate Change Authority Act 2011 (CCA Act) for the
better revelation of electricity market conditions, to provide much-required conviction to the
renewable energy industry as well as to enable sustainable growth in generation of renewable
electricity.
The changes in the RET are likely to impact on business, the amendments proposed by the
Renewable Energy (Electricity) Amendment Bill 2015 are required to be taken into consideration
as it will provide a more in depthinvestigation regarding the purpose of these changes for the
renewable energy industry in the country.
Contemporary issue from personal perspective
It is a well-known fact that the renewable electricity generation options are increasing day by day
and are already in commercial use or in development phase. It includes solar thermal plants,
solar PV, hydro, geothermal, wind, bio-mass, ocean wave and tidal energy. Presently, rooftop PV
is the most significant renewable energy generation to which consumers have direct accessibility.
The utilization of distributed solar PV has been prompt and around 1.5 million distributed solar
PV systems have now been installed all over the country(The Conversation 2017). However, the
comprehensiveincorporation of the renewable energy sources within the existing NEM grid
network positions significant technical, legal as well as regulatory challenges. As the electricity

supply is based on refinedinterconnecting technologies that couldequalize the supply and
demand of electricity without destroying electricity lines, the renewable energy sources such as
wind and solar energy sources are discontinuousby nature and couldcreate considerable technical
challenges to the ability of the grid network for the purpose of integrating them. Another
challenge to such an incorporation is the fact that numerous renewable energy resources are
usually located in the remote regions that are currently unapproachable or expensive to connect
to the existing grid (ACT Government 2018). Thus, it is suggested that if Australia prefers to
utilize renewable energy resources in abundance, cautious planning and restructuring of the
energy market is essential for the successful integration of thediscontinuous renewable energy to
the grid and system. Above all, it will require the reformation of the legal as well as regulatory
outlines for the NEM in order to encourage the investment in the large scale transmission
expansion and advancementsof the renewable sources of generation as well as to facilitate the
institution of the battery storage technologies so that the power systems couldeasily access
remote renewable resources and distribute efficient as well as reliable renewable energy. It has
been experienced by various international engineering firms as it demonstrates that it is
completely practicable and possible. Furthermore, the Finkel Review has alsorecognized the
requirementofrenovating the NEM in order to ensure methodical and systematic transition to a
reliable as well as low emissions electricity system.As per the recommendations provided by
Finkel Review, the improved system planning wouldenable the efficient development as well
aslinking of renewable energy zones across the NEM in the country.
Following amendments should be taken into consideration in the ARENA Act:
 The clarity regarding the National Energy Guarantee (NEG) of the Federal Government
in response to the future security of NEM should be considered.

 The approach towards Paris emission reduction target of Australia should be reduced to
2025 instead of 2030.
 Should allow affordable, reliable, and low carbon energy services to the businesses and
households.
 Should focus on redesigning and operations of energy markets
 The amendments should be made to provide more conviction to the renewable energy
industry.
 The changes in RET should be adopted.
 The technical, legal as well as regulatory challenges due to the incorporation of
renewable energy sources within the existing NEM grid network should be considered.
Conclusion
Despite various advantages associated with the sustainable use of renewable energy in Australia,
there is requirement of amendments in the existing renewable energy laws for the betterment a
sustainability of the renewable energy in the country. Various contemporary legal, business as
well as personal issues regarding renewable energy laws require amendments in the existing laws
for the sustainable renewable energy sector.
References
ACT Government 2018,How do the ACT’s renewable energy reverse auctions work?, viewed 08
May 2018, <http://www.environment.act.gov.au/energy/cleaner-energy/how-do-the-acts-
renewable-energy-reverse-auctions-work>.

Ashurst 2015,Summary of Proposed Amendments To The Renewable Energy Target., viewed 08
May 2018, <https://www.ashurst.com/en/news-and-insights/legal-updates/energy-alert-
summary-of-proposed-amendments-to-the-renewable-energy-target/>.
Byrnes, L. & Brown, C. 2018,Australia’s renewable energy policy: the case for intervention.
Clean Energy Regulator, 2016. Tracking Towards 2020: Encouraging renewable energy in
Australia.
Clean Energy Regulator 2017,Legislation and regulations., viewed 08 May 2018,
<http://www.cleanenergyregulator.gov.au/About/Legislation-and-regulations>.
Commonwealth of Australia 2018,The Renewable Energy Target RET, scheme., viewed 08 May
2018, <http://www.environment.gov.au/climate-change/government/renewable-energy-
target-scheme>.
Department of the Environment and Energy 2015,Certainty and growth for renewable energy.,
viewed 08 May 2018,
<http://environment.gov.au/minister/hunt/2015/mr20150623.html>.
Global Legal Insights 2018,Energy 2018 Australia., viewed 08 May 2018,
<https://www.globallegalinsights.com/practice-areas/energy-laws-and-regulations/
australia>.
Institution of Engineers Australia 2017,The Future of Australian Electricity Generation.
McCullough Robertson 2017,Renewable energy in Australia. McCullough Robertson.
Parliament of Australia 2017,Renewable Energy Electricity, Amendment Continuing the Energy
Transition, Bill 2017., viewed 08 May 2018,
<https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Result
s/Result?bId=r5915>.

The Conversation 2017,2017 will be a big year for Australia’s energy system: here’s what to
look out for., viewed 08 May 2018, <http://theconversation.com/2017-will-be-a-big-year-
for-australias-energy-system-heres-what-to-look-out-for-71703>.