Economic Analysis of Australia's Renewable Energy Policies

This report provides a detailed analysis of Australia's stance on renewable energy, examining the country's abundant renewable resources and the growing interest in their utilization. It explores the role of various interested parties, including environmentalists, economists, politicians, and communities, in shaping energy policies. The report delves into an economic analysis, comparing the costs of renewable and non-renewable energy sources, and highlighting the high initial investment costs, installation expenses, and maintenance requirements associated with renewable energy technologies. It further discusses the impact of production costs, competition, and consumer behavior on the adoption of renewable energy. The report concludes with recommendations for government involvement, encouraging production, and educating consumers. It emphasizes the potential benefits of renewable resources, such as reducing fuel import costs and contributing to decarbonization efforts. The report highlights Australia's policy targets and the need for sustainable practices and efficient resource allocation in the face of climate change and the depletion of fossil fuels. This report is available on Desklib, a platform providing students with AI-powered study tools and resources.

Running Head: AUSTRALIA’S STAND ON RENEWABLE ENERGY
Newspaper Analysis
Australia’s stand on Renewable energy

AUSTRALIA’S STAND ON RENEWABLE ENERGY 1
Table of Contents
Introduction................................................................................................................................2
Interested Parties........................................................................................................................2
Economic Analysis.....................................................................................................................4
Recommendations......................................................................................................................5
Conclusion..................................................................................................................................6
References..................................................................................................................................7

AUSTRALIA’S STAND ON RENEWABLE ENERGY 2
Introduction
Renewable energy refers to the energy accumulate from the sources which are perennial in
nature. They are replenished naturally on human timescale. These include resources like
wind, biofuel, geothermal, hydropower, biomass, tidal, solar, wave and others. Australia is
abundant in these high potential resources, which need to be tapped. They are essential
because of the non-renewable nature of the commonly used energy sources and the
environmental issues associated with it. In Australia, renewable energy sources play an
important role in the electricity generation through sources like hydro, wind, geothermal,
solar, landfill gas and many others. It is the 17th largest non-renewable energy consumer, 9th
largest producer of the energy and attains the rank of 18th per capita energy consumption
(Azad et al., 2014).
Figure 1: Renewable resources in Australia
(Emma-Jane et al., 2018)
Interested Parties
Energy crisis has led to increased interest in researches by the economic, environmental,
social and political market researchers. The aim is to secure the consumption of energy,
promote development and protection of environment (Mardani et al., 2015). Renewable
energy sources have underlying potential and can be highly beneficial for the sustainability of

AUSTRALIA’S STAND ON RENEWABLE ENERGY 3
countries in terms of environment, social and economic (Jaramillo-Nieves & Río, 2010).
Australia has highly untapped potential which can contribute largely to the economy’s
growth. The major parties involved are the environmentalists, economists, politicians, various
organisations and the communities.
The government of Australia established the renewable electricity development through
energy policy in response to the climate changes, economic stimulus and energy development
and independence. It targets renewable energy to 50% by 2030 and zero net emission by 2050
(Williams & Scott, 2018). There are different goals for different regions in Australia and the
major companies in the renewable energy sector of Australia are shown below:
Figure 2: State and territory government goals in Australia for Climate change
(Holt, 2016)

AUSTRALIA’S STAND ON RENEWABLE ENERGY 4
Figure 3: List of companies in the Australian Clean Technology or Renewable Energy Sector.
(Eco Citizen Australia, 2018)
Economic Analysis
Australia aims to change the weather through 50% use of renewable energy by 2030 from
only 17.3% in 2016 (Clean Energy Council Australia, 2016). The issue raised with the use of
these resources is the huge costs. The diagram compares the costs of non-renewable and non-
renewable resources.

AUSTRALIA’S STAND ON RENEWABLE ENERGY 5
Figure 4: Costs of different fuels
(JoNova, 2015)
The costs of development of technology to tap the potential of renewable resources are very
high. The initial cost incurred in the research is extremely high which makes the whole
process very expensive to adopt. Even after the development of the technology, the
installations are expensive and highly non-feasible at the individual level. This makes the
adaptation of the technology unaffordable to the common masses. Also, the costs of
maintenance of such installations are very high. Proper cleaning and servicing are required
from time to time.
The production is done on a small level due to the unpredictable demand patterns and the
success rate of the innovation. The small level of production also adds to the high cost. The
economy of scale takes time to achieve and to bring down the price of the commodity.
Economies of scale can be achieved through increased production.
Figure 4: Economies of scale can be achieved by the increased production.
(Economics Help, 2018)
There is also competition from other firms to aim to develop a cheaper and better technology.
This restricts the firms from producing on a large scale and to reduce down the costs. There is
a need for constant investment in research and development to improve the quality and
quantity of the produce.

AUSTRALIA’S STAND ON RENEWABLE ENERGY 6
The people are reluctant to purchase a new technology. This is because of the high price that
they have to pay. A rational consumer waits for the product to establish in the market. They
wait for the reviews from other people. Also, they wait for other firms to develop the same
commodity at a lower price. The price of fuel will increase with the shift from non-renewable
to renewable source of energy. This will further impact the price of all the other commodities
because of role of fuel in transportation in the short-run. The costs of production of firms will
also rise.
Recommendations
The solutions to the above raised issue could be the involvement of the Australian
government. It should encourage the consumers and firms to adapt to renewables sources.
This can help the cost to fall due to increased production demand. The firms should be
encouraged to increase the production to bring down the costs. There can be laws for the big
firms to resort to renewable sources for energy generation. This can make the price of
renewable energy resources fall below the prices of non-renewable energy sources (Sharma,
2018). Also, the government and other organisations must educate the consumers with the
benefits of renewable fuels and help them get familiar with the fuels.
Nearly half of petroleum and jet fuel in Australia is imported from Japan and South Korea
(Mushalik, 2017). The renewable resources can help bring down the costs of fuel imports of
Australia. The burden of the government expenditure will reduce and the fiscal deficit. This
will help the government in the decarbonisation challenge.
Conclusion
It can be seen that Australia has taken steps to move towards cleaner fuels. It aims to adapt to
renewable sources of energy and increase the sustainable development and improve the
resource allocation. The changes in the environment and the climate crisis have increased the
need to shift to cleaner fuels. The fossil fuels and other non-renewable resources are close to
extinction which will lead to increase in their prices. Australia has formulated policies for the
increased use and production of such fuels.
The shift can be accelerated with the increased knowledge among the citizens. The
government and other organisations can increase the knowledge among the consumers. The
production of equipment and machines must also be increased to lower down the cost to an

AUSTRALIA’S STAND ON RENEWABLE ENERGY 7
individual consumer. It is important that people life a sustainable life with efficient resource-
allocation.

AUSTRALIA’S STAND ON RENEWABLE ENERGY 8
References
Azad, A.K. et al., 2014. Energy Scenario: Production, Consumption. Journal of Power and
Energy Engineering, 02, pp.19-25. Available at:
https://file.scirp.org/pdf/JPEE_2014041511424432.pdf [Accessed 28 April 2018].
Clean Energy Council Australia, 2016. Clean Energy Australia Report. [Online] Available at:
https://www.cleanenergycouncil.org.au/policy-advocacy/reports/clean-energy-australia-
report.html [Accessed 28 April 2018].
Eco Citizen Australia, 2018. Renewable Energy Stocks & Companies in Australia. [Online]
Available at: http://www.ecocitizenaustralia.com.au/renewable-energy-companies-australia/
[Accessed 28 April 2018].
Economics Help, 2018. Definition of economies of scale. [Online] Available at:
https://www.economicshelp.org/microessays/costs/economies-scale/ [Accessed 28 April
2018].
Emma-Jane, Kimberley, Maxine & Micah, 2018. Tasmanian Natural Resources. [Online]
Available at: http://tasmaniaa.weebly.com/natural-resources.html [Accessed 28 April 2018].
Holt, D.P., 2016. A pathway needed as Australia ratifies the Paris Agreement. [Online]
Available at: https://www.energetics.com.au/insights/thought-leadership/a-pathway-needed-
as-australia-ratifies-the-paris-agreement/ [Accessed 28 April 2018].
Jaramillo-Nieves, L. & Río, P.d., 2010. Contribution of Renewable Energy Sources to the
Sustainable Development of Islands: An Overview of the Literature and a Research Agenda.
Sustainability, 02, pp.783-811. Available at: www.mdpi.com/2071-1050/2/3/783/pdf
[Accessed 27 April 2018].
JoNova, 2015. Labor wants to waste $100b to make Australian energy 50% renewable, more
expensive, by 2030. [Online] Available at: http://joannenova.com.au/2015/07/labors-want-to-
waste-100b-to-make-australian-energy-50-renewable-more-expensive-by-2030/ [Accessed 28
April 2018].

AUSTRALIA’S STAND ON RENEWABLE ENERGY 9
Mardani, A. et al., 2015. Sustainable and Renewable Energy: An Overview of the
Application of Multiple Criteria Decision Making Techniques and Approaches.
Sustainability, 07, pp.13947-84. Available at: www.mdpi.com/2071-1050/7/10/13947/pdf
[Accessed 28 April 2018].
Mushalik, M., 2017. Almost Half of Australia’s Petrol, Diesel and Jet Fuel Imports come
from South Korea and Japan. [Online] Available at: http://www.resilience.org/stories/2017-
08-21/almost-half-australias-petrol-diesel-jet-fuel-imports-come-south-korea-japan/
[Accessed 28 April 2018].
Sharma, G., 2018. Production Cost Of Renewable Energy Now 'Lower' Than Fossil Fuels.
[Online] Available at: https://www.forbes.com/sites/gauravsharma/2018/04/24/production-
cost-of-renewable-energy-now-lower-than-fossil-fuels/#457a30e7379c [Accessed 28 April
2018].
Williams, P. & Scott, J., 2018. Australia Edges Toward New Energy Policy After Decade of
Turmoil. [Online] Available at:
https://www.bloomberg.com/news/articles/2018-04-20/australia-edges-toward-new-energy-
policy-after-decade-of-turmoil [Accessed 28 April 2018].