Renewable Energy Support - Case Study Example

Running head: Government Business Relations Your name Course name Professors’ name Date Context The essay calls for a thorough description of how governments of Canada and Australia have shown support for renewable energy. This requires an examination of factors such as local content requirements, financial and tax incentives, favourable customs duties, export credit assistance, certification, renewable energy targets, and research and development. These are policies implement by countries around the world to help improve the use of renewable energy and ensure environmental or rather ecological sustainability. Australia for example, has implemented a range of policies both at national and local levels to improve its campaign for usage of renewable energies. Introduction This paper seeks to compare Australian and Japanese Governments assistance in the sector of renewable energy. The support has been motivated by rising concern about climate change and international effort to cut down emissions of green house gasses. Governments around the globe are looking into the possibility of exploiting renewable sources of energy as opposed to non-renewable sources. The first part of the paper is a description of how Australia Government has supported renewable energy. This will entail a detailed description of a number of national and local policies formulated to reduce greenhouse gas emission. The essay will then proceed to highlight the role of Canadian government in supporting renewable energy. Most Canadian policies are formulated and implemented at provincial and territorial levels. The last part is analysis of the most effective policy. Description: Australia In 1998, the Government of Australia formulated a national policy dubbed National Greenhouse Strategy to protect the future. This was a progress made on the 1992 National Greenhouse Response Strategy. Another policy named Measures for a Better Environment was initiated in 1999. In addition to State policies, Australia now has more than 100 policies that seek to address climate change. It is apparent that all these initiatives are intended to demonstrate government commitment to renewable energy. Existence of market mechanisms, government grants, and other programs affirms government orientation towards renewable energy. The Renewable Energy Act of 2000 was established with three objectives: encourage use of renewable source of energy, reduce emission of greenhouse gasses, and ensure that sources of energy were suitability. The certificate system established by energy regulators increased the value for renewable electricity produced by generators hence a high demand for renewable energy generation. Apart from reducing renewable emission of greenhouse gasses, the certification system has the effect of ensuring that energy sources are ecologically sustainable. By the year 2020, the expanded Renewable Energy Target will translate to 45,000 gigawatt-hours. This target necessitates the use of renewable technologies. In the end, power generated from solar, wind and geothermal will increase considerably (RTWG, 1999). Solar industry in Australia is very advanced with highly skilled workforce, sophisticated research and development facilities, and government support. To point out government support for solar energy industry, Australian government operates A$5 billion Clean Energy Initiative under the Solar Flagships Program and the Australian Solar Institute. Out of the monetary allocations, A$1.48b is channelled to Solar Flagships Program towards construction of large-scale solar stations in Australia. On the other hand, A$150m is apportioned to Australian Solar Institute for the purposes of research and development. The intention of the program is to develop an advanced solar sector in Australia and this is obviously seen in Solar Photo Voltaic, Solar hot water, and solar thermal that are well established. Wind energy in Australia has a strong base marked by large and growing domestic energy market. Aside from 87 wind firms that are already operating in Australia, 129 proposed projects are anticipated to change renewable energy in Australia (Joanna, 2005). At its base in Antarctic Mawson Base, Australia managed to produce energy by using the strongest winds on Earth. This has been possible owing to government support through Wind Energy Forecasting Capability that was funded with A$14million. Additionally, government support is noticeable within research where funding is allocated for predicting weather patterns and their effect on wind energy. To exemplify government support for the geothermal, A$58.9 million Energy Security Program is established to look into the possibility of improving geothermal source of energy. The government is also supporting the Geothermal Industry Development Framework that focuses on issues hampering geothermal sector. Notwithstanding the aforementioned sources of renewable energy, Australian government is also supporting wave and tidal, Bioenergy, and Biofuels sources. This support takes the form of monetary, research and development, policy formulation, and collaborating with experts around the world. Canada The success of renewable energy in Canada relies on government support. Policy goals, which are set at the provincial and territorial levels determines the success of renewable energy in Canada (Brander, 2000). Financial and tax incentives are implemented in various Canadian province and has registered success in the use of renewable energy. The dominant source of energy is hydroelectric power that is generated at water rich northern part of the country. Wind, solar, biomass, and geothermal are small scale in Canada but are increasingly being improved. Specifically, wind energy is growing fast and has managed to beat the 2,000 MW mark on installed wind energy capacity. A study by Doug (2006) confirms government support for wind energy and this is illustrated by formulation of Wind Power Production Incentive program. This program is intended specifically to aid investment in wind energy. Moreover, the government uses ecoENERGY in Renewable Power Program to provide support for use of renewable energy. ecoENERGY program that was established in 2008 with a mandate to install 4,000 MW renewable energy by 2003. The commitment to clean energy is apparent with government support for clean energy. Federal government has well-structured market-pull programs that support utilization of bioenergy. These programs include capital allowances, biofuel exemptions, and Canadian Renewable Conservation Expenses. There are other programs for all renewable energies such as the Large Final Emitters, LFE trading system. Owing to the fact that Canada is bordering three oceans, it is rich in tidal current and wave resource. The Canadian government invested 20MW in tidal energy plant and has been in operation since 1984. This is a clear demonstration of government commitment to renewable source of energy. Analysis The most favourable assistance policy is the Renewable Energy Target. This policy has registered success in Australia and requires that 20% of Australia’s electricity be produced from renewable sources by the year 2020. The Australian government has proceeded to set targets, which must be met by the retailers and wholesale buyers of electricity. Those who have complied with the target requirements are under obligation to surrender renewable energy certificates failure to which will attract a short charge of $65 per MWh. A market for RECs is created where retailers and wholesalers can choose either generate electricity for renewable sources or purchase REC. Initially, RET was an outcome of Mandatory Renewable Energy Targets that had an objective of generating 9,500 GWh of additional renewable energy by 2010. Subsequently, targets were set to lead to achievement of 9,500GWh. The coming into force of Renewable energy bill of 2009 saw the replacement of MRET with RET. Its effect was raising the targets to 45,000 GWh by 2020 and further introduction of solar credit schemes. On the contrary, Canada does not have a national target like that in Australia. Canada has a number of policies implemented at provincial and territorial levels. As noted in the description of government support for renewable energy, Canada has implemented successfully the financial and tax incentives (Wagman, 2011). Financial incentive takes the form of awarding developers who support locally made turbines. These investors are also offered loans to finance their projects at low interest rates. Moreover, the government avails financial incentives to power generated from wind using local turbines. Quabec province has a program that offer 40% labour tax credit to wind industries in that area. Added to this is a tax exemption for the whole manufacturing. Conclusion The first part of the paper places the essay in its context by describing a number of elements that should be looked at when comparing government support for renewable energies. While describing measures taken by government in both Canada and Australia, it was apparent these countries operates a number of policies together. In this case, no one policy is good for all. Australia for example operates policies and financial strategies to support renewable energies. Conversely, Canada uses the strategy of local content requirements in conjunction with financial and tax incentives. Within the perimeter of local content requirements, Canadian developers are offered incentives for using local turbines in their investments. Reference List Brander, J. A. (2000). Government Policy toward Business. 3rd Ed. Toronto:John Wiley and Sons Inc. Doug, B. (2006). Canada Biomass-Bioenergy Report. Available from www.bioenergytrade.org/.../canadacountryreportmay312006.pdf. Joanna, L., & Wiser, R. (2005). Fostering a Renewable Energy Technology Industry: An International Comparison of Wind Industry Policy Support Mechanisms. Available from: http://eetd.lbl.gov/EA/EMP. RTWG. (1999). Final Report to the Greenhouse Energy Group: Implementation Planning for Mandatory Target for the Uptake of Renewable Energy in Power Supplies May 1999. Canberra: Australian Greenhouse Office. Wagman, D. (2011, April 19). Canadian Renewable Energy Market Overview. Avaiulable at: http://www.renewableenergyworld.com/rea/news/article/2011/04/canada- market-overview-o-canada. Read More