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.