Australia's Renewable Energy Transition: An Economic Analysis Report

This report provides an economic analysis of Australia's renewable energy policy, focusing on the government's efforts to increase the use of renewable resources in electricity generation and transportation. It examines the economic justifications for this transition, including increasing energy demand, environmental concerns related to coal-fired power plants, and job creation opportunities. The report also discusses the role of foreign investment, the increasing use of solar panels, and the impact on electricity prices. It recommends that the Australian government invest in raising awareness about the benefits of renewable energy and attract further investment in the sector to achieve its renewable energy targets. Desklib offers a range of similar documents and study tools for students.

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ECONOMICS ASSIGNMENT
NEWSPAPER ANALYSIS

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Table of contents
Introduction................................................................................................................................3
Economic analysis......................................................................................................................3
Views and recommendations.....................................................................................................6
Conclusion..................................................................................................................................6
Reference....................................................................................................................................8

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Introduction
Renewable energy is an important source of energy for any country as it has
characteristics to replenish itself after a certain period of time. The main use of renewable
energy is in electricity generation and transportation sector. Australia also uses renewable
resources for creating other energies that can fuel the needs of the country. The aim of this
paper is to analyse the stand of the government of Australia in the context of renewable
energy. The secondary data and information are collected regarding the use of renewable
energies in Australia and economic analysis is done.
Currently, 4.1% of the electricity generation is done through the use of renewable
energy. However, the government of the country has decided to increase the use of renewable
energies in the electric production and transportation industries. Byrnes et al. (2016) stated
that the prime reason for the target is the opportunity that is available to the country. It can
use the wind powers and the land to produce electricity which can easily meet one-fourth of
the demand of the country. However, the major issue is that, there are no large-scale
production plants in the country and hence the cost of production is very high. This high price
of renewable energy gives rise to the demand of conventional energy. The government is
taking the responsibility to attract foreign investment in order to develop and boost the
renewable energy production in the country. Therefore, this topic mainly concerns the
government of the country, the players in the energy industry and the workers working in the
industry.
Economic analysis
From the perspective of economics, this decision to increase the use of renewable
energy has justification. The demand for the energy is increasing with the increase in the
population of the country. The conventional coal-fired power plant is already meeting 67% of
the demand of the country (Martin and Rice, 2015). Apart from that, producing electricity
using coal is not only harmful to the environment, but it also increases the cost of operation
as well. The decision of the government in terms of transition to the renewable energy
production and use will also increase the job opportunity for the people of the country as
well.
Again, from the perspective of resource economics, the decision also makes sense.
The use of coal in the production of electricity increases the pollution in the environment.
According to Bloch et al. (2015), most of the economic activities use the non renewable
energies and hence the degradation of the environment is inevitable. Therefore, using the
renewable resources for the production of the electricity is the equilibrium from the point of

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view of resource economics branch. Gude (2015) highlighted that equilibrium from the
environmental perspective is also important for long term sustenance of the environment.
Figure 1: the investment in the large scale renewable energy in Australia
(Source: Byrnes et al. 2016)
Furthermore, another underlying objective of the government is to diversify the
source of the electricity and fuel for transpiration. This according to the principles of
economics would also result in a diversification of occupation within the Australian
economy. However, the figure 1 suggests that, there is no pattern in the inflow of investment.
Howard et al. (2018) stated that this is due to the lack of policy and the clear goal of the
government regarding the growth and the development of the renewable energy sector of the
country.

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Figure 2: the use of solar panel in Australia
(Source: Bhattacharya et al. 2016)
However, the government has managed to increase the use of solar panel in different
provinces of the country. According to the data, a higher percentage of use of solar panel can
be seen in South Australia with 28.8% (Azad et al. 2014). Apart from that other province also
shows high percentages of use of the solar panel. This clearly shows the intent of the
government and the preferences of the people of the country. This can also be justified with
the principles and the theories of economics. These are the changes in the demand due to the
shift in the preferences of the customers. The corresponding demand for the conventional
form of electricity has reduced. In this context, the theory of substitute product can also be
stated as solar power is a direct substitute of the conventional powers. As per the data of
figure 3, the price rose sharply till 2013 and after that, it started falling. This is due to the
increase in the demand for the substitute goods of conventional electricity (Hua, Oliphant and
Hu, 2016). Another reason for the decrease in the demand of the regular electricity is the
decrease in the price of the alternative renewable energies due to economies of scale and
technological development.

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Figure 3: The electricity price in Australia
(Source: Bhattacharya et al. 2016)
Views and recommendations
Based on the analysis of the paper, it is recommended to the government of Australia
to invest money in order to increase awareness among the citizens of the country regarding
the benefits of using renewable energy. This would also increase the demand for the
renewable resource use in the market and hence the Mandatory Renewable Energy Targets of
the country will be accomplished faster. In addition to that, the government is also
recommended to carry out campaigns so that investors can also be attracted towards
development of the renewable resource industry. Furthermore, it is also recommended to
the new companies to start a venture in the sector in order to boost the use of renewable
energy. This will also increase the job opportunity for the people of the country as well.
Conclusion
Therefore, the stand of Australia in terms of renewable energy use in the production
of electricity and transpiration is clear. The aim of the government is to increase the use of
the clean energies by the end of the year 2020. There are many of the underlying objectives
as well which will be accomplished following the increase in the use of renewable energy in
Australia. The number of job creation in the field would rise and hence this will lead to
sustenance. However, as per the finding of the study, the government needs to take
responsibility in order to attract foreign investment to fund the growth and the development
of the sector.

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Reference
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