Introduction

It is now widely accepted that climate change is one of the most pressing challenges facing humanity, due to its detrimental impact on human and natural systems (IPCC, 2007). The climate change challenge is an outcome of increase in global temperature (global warming) caused by anthropogenic greenhouse gas (GHG) emissions. The use of fossil fuels for electricity generation is the single largest source of these emissions, responsible for almost one-fourth of global emissions (IPCC, 2014). In the absence of any significant transformation in the electricity generation technology-mix, it is expected that global emission levels will increase by at least 35 per cent, by 2040 (compared with 2015 levels), which would potentially intensify the climate change challenge (IEA, 2017).
Recent years saw growing efforts to search for options to defossilise electricity generation, especially in Australia (the focus of this paper), which is considered as one of the worst emitters in the world in terms of emissions per capita (The Climate Council, 2015). Among various options under consideration, a consensus seems to have reached that renewable energy (such as, wind and solar) is an attractive option. The attractiveness of renewable energy becomes even greater if one takes notes of the growing uncertainty about the viability and acceptability of alternative options for electricity defossilisation, particularly nuclear energy and carbon capture and storage (CCS).
Considerable work has already been undertaken to discuss the role of renewable energy in electricity defossilisation. This discussion has primarily been confined to the techno-economic aspects of renewable energy, focusing on its technical potentials (Dawson and Schlyter, 2012; Shafiullah et al., 2012; Yusaf et al., 2011), cost-effectiveness (ATSE, 2009; Kann, 2009; Lu et al., 2017; Trainer, 2017), externalities (such as, multiplier effects) (SKM, 2012, 2013; The Climate Institute, 2011), and risks (for example, merit-order effects) (Diesendorf, 2007; Needham, 2008; Prasad et al., 2017). There is rather scant discussion of the policy, regulatory and institutional aspects of renewable energy. This paper argues that these non-techno-economic aspects are equally important, because they will largely determine the extent to which renewable energy is likely to contribute to electricity defossilisation. Insights into these aspects are therefore pre-requisites for developing a more concerted discussion on the role of renewable energy in the Australian electricity landscape.
Against the above backdrop, the primary objective of this paper is to assess the policy, regulatory, and institutional settings for renewable energy in Australia. Policy setting, in the context of this paper, refers to the political processes for making policies to promote renewable energy. Regulatory setting focuses on the prevailing legislations for regulating various facets of renewable energy, such as, planning, financing, implementation and operation. Institutional setting is about the responsibilities of various institutions involved in making and implementing renewable energy policies and regulations. Further, this paper assesses the policy, regulatory, and institutional settings in the broader electricity and socio-economic policy settings. This assessment is made based on the argument that generation technology-mix is shaped by the underlying electricity policy setting, which in turn draws its imprimatur from the wider policy setting for socio-economic development of the nation. Hence, the policy, regulatory and institutional settings for promoting renewable generation are inextricably intertwined with the broader electricity and socio-economic policy settings.
The assessment in the paper is empirical in nature. Such an assessment – this paper contends – is extremely useful, especially for policy-makers and energy planners. Its usefulness arises from its ability to demonstrate the significance of policy, regulatory, and institutional aspects of renewable energy, and how appreciation of these aspects is critical for providing context and meaning to the techno-economic discussion of renewable energy. The insights of the assessment are not only relevant for Australia, but also for other countries currently considering renewable energy as an option for defossilising electricity generation.
This paper is organised as follows. Section 2 provides a brief narrative on the electricity and socio-economic policy settings for Australia – essential for appreciating various arguments presented in this paper. Section 3 provides an overview of the policy, regulatory and institutional settings for renewable energy in Australia. The efficacy of these settings is also discussed in the section. Section 4 presents some broad conclusions of the paper.