Energy Source and Distribution catches up with sustainable policy academic Dr Karen Hussey to discuss the solar energy revolution in Germany and what the local market can learn about moving towards a low carbon, cost-effective and reliable energy industry.
When it comes to talking about emerging energy technologies and policies, academia looks to Germany. Here, government support of research and development into renewables has enabled a ground-blazing transition to a more sustainable energy system; a transformation dubbed Energiewende.
Energiewende encompasses a range of targets, including 45 per cent renewable electricity by 2025 and 80 per cent by 2050; 18 per cent renewable energy by 2020 and 60 per cent by 2050; and cutting the total energy consumption by 20 per cent by 2020 and 50 per cent by 2050. Importantly, these aren’t just figures. Germany is currently on-track to meet these targets, with renewable energy contributing to about 30 per cent of its energy generation this year, mostly through wind and PV.
For associate professor at The Australian National University’s Fenner School of Environment and Society, Dr Karen Hussey, Germany’s ability to recognise the economic advantages of investing in new technologies has set an international standard.
“It’s not about making a quick buck but rather about supporting an industry – a manufacturing industry – from its early, largely unprofitable days through to when it becomes an industry leader,” she says.
“But it’s important to recognise this process has been less of a revolution and more of a slow burn, which started 30 years ago when the German government began investing in renewable energy technologies.
“The unprecedented growth of solar PV in particular has been fuelled, in large part, by policies that incentivise clean energy. Germany’s feed-in tariff policy, which pays renewable energy producers a set amount for the electricity they produce under long-term contracts, has driven the solar power boom. Admittedly though, it has cost a fortune in the short term and they are now revising the conditions.”
Importantly, the education sector in Germany has also been adapted to reflect changes in the industrial base of the economy, unlike that in Australia, which Dr Hussey says holds a disproportionate focus on tertiary level education.
“Germany recognises they need the trades as much as they need people with tertiary degrees. So the role of VET – and extremely high standards in VET awards and diplomas – means they have a workforce that is highly skilled,” she says.
But what does this have to do with the Australian energy market? According to Dr Hussey, what is happening in Germany is an indication of what the Australian energy future looks like.
Specifically, she says three key messages can be taken from the German experience. Firstly, the generation and penetration of renewable energy technologies into an existing grid is technically possible and will become more possible as energy storage solutions gain prominence.
Secondly, the cost function of renewable energy generation is declining, making it more and more feasible from an economic perspective and, thus, more likely to proliferate worldwide.
Finally, a long-term, government-led and supported strategic vision for a manufacturing industry – such as the German government’s support of renewable energy – can and will pay off for the local economy.
“The Energiewende isn’t some left-leaning greenie vision; it is a carefully considered policy that successfully addresses sustainable development, encompassing environmental but also social and economic goals too,” Dr Hussey says.
In a decade’s time, Dr Hussey is the first to say the German manufacturing industry will be laughing all the way to the bank as Australia and the rest of the world buy off-the-shelf solutions for renewable energy and energy storage technologies that were engineered and manufactured by German companies.
“This outcome shouldn’t really be surprising and it’s not unique to the renewable energy sector: it’s not sheer serendipity that German companies have been operating in China long before China was an economic powerhouse. For example, Volkswagen began its operations in China in 1978 and was the first foreign car manufacturer to open a joint venture there in 1984, and is now the second largest foreign carmaker after GM, which opened in China in 1997,” she says.
ES&D: We can look overseas for examples of how to move forward but because of Australia’s unique energy landscape, an energy solution can’t be imported. How important is it the Australian energy industry focus on facilitating, encouraging and promoting its own education, research and training?
Dr Karen Hussey: You’re right, an energy revolution is unlikely to happen in this country because the government doesn’t support such a revolution and nor do some key actors in our energy sector. The outliers are obviously those that have a competitive advantage in using renewable energy, and the front-runners who can see the world is changing, such as the ACT government, and a few of the more visionary CEOs of utilities – Ergon and ActewAGL come to mind.
The role of education, research and training is critical because it’s what will make us ready to incorporate those technologies as and when the momentum builds.
As with any shift in preferences, it’s those who recognise it and are ready for it who reap the rewards. But to be ready for it, you’ve got to look beyond the next 12 months and incorporate changes into your long-term strategy. That’s why the industry skills councils are so important, along with organisations like E-Oz that implement the right policy settings and standards and do so in collaboration with industry and the workers who have to accept those changes.
ES&D: In a previous issue of E&SD, Australian Power Institute chief executive Mike Griffin said failure to attract, develop and retain the best engineering talent in the country could have dire consequences for Australia’s future. What’s your response to this as someone who works in academia?
Dr Karen Hussey: I think he’s absolutely right and he raises a critical challenge both the Australian government and industry needs to get on top of as a matter of priority.
My understanding is there is a dire shortage of mechanical and electrical engineers in this country, which means if we want those skills – and we do – then we’ll have to import them. On the one hand that’s fine, but on the other hand you have to ask to yourself, “what do we want the next generation of Australians to be working on? What kind of jobs will be available for kids that will be graduating from Australian schools in 2020, or 2025, or 2030?”
Frankly the problem starts even earlier than at the tertiary level: it’s about numeracy and literacy in schools and we’re doing pretty poorly on all international metrics in those areas. We’ve been slipping vis-à-vis our OECD counterparts for more than a decade, so we’re actually getting dumber as a nation.
ES&D: Considering the Australian power engineering industry is going through significant changes, whether that be restructural pressures, budget restraints or capacity limitations, the top tier is optimistic the next generation can handle it. How do you give people the right skills to take on the ‘new’ energy landscape?
Dr Karen Hussey: I’m going to be blunt: we are a rich, export-oriented economy, which has historically relied on mining and resources for our GDP, and to a lesser extent agriculture, and then higher education and tourism. But the days of digging stuff out of the ground to support our lifestyle are coming to end and while we are hugely innovative in agriculture, there’s very little ‘value add’ being pursued in our mining sector.
The competition in the higher education space and even the tourism sector is also increasing exponentially, so across the board we need to be at the top of our game – and a fundamental aspect of that is being able to see the new industries on the horizon, exploit them by getting the policy settings right and see those changes through over a sustained period of time. We need to avoid the temptation to wax and wane when a new government comes in.
To be relevant in the future we need a sustained commitment to our education sector, from primary school through to VET and universities. This is a fraught space at the moment – one which seems dominated by the need to cost-recover, and that is fiscally responsible in the short term, but must be pursued with a strategic vision for the future in mind.
“She’ll be right, mate” won’t cut it tomorrow.
ES&D: What are some rules of thumb that need to guide industry’s collective efforts to adapt its workforce and get the next generation “future ready”?
Dr Karen Hussey: We need a diverse workforce, with diverse qualifications. Not everyone needs a tertiary degree, and indeed an emphasis needs to be placed on complementarity and understanding between the different levels of qualification.
Engineering degrees need to focus on basic skills as well as higher order conceptual work; the trades need to include a focus on literacy so that electricians et al understand the highly regulated environment in which they work. The complementarity of qualifications can be enhanced by a greater focus on internships and collaboration between educational institutions and industry.
The capacity for an industry to be adaptable, visionary and savvy will also, to a great extent, depend on the proportion of women it employs. Female employees bring a range of skills that are invaluable and which will be even more valuable as industries become more internationalised, regulated, integrated, and perhaps even more customer focused.
An emphasis needs to be placed on developing the capacity of our young women in the power industry and those companies that lead the charge here will benefit greatly.