Although I give the US political environment grief from their lack of action at a federal level its not all doom and gloom in America. Since Arnold Schwarzenegger has become governor of California his mantra has been “We are not waiting for politics, we are not waiting for problems to get worse; we are not waiting for the federal government; we are not waiting period; because the future does not wait”.

His state government has set aggressive guidelines and targets for renewable energy mix in the power generation portfolio required to power that state. In 3 years time 20% of energy must come from renewables and this doesn’t include the current level of 28% already provided by generation from hydro and nuclear power. California has set a 30% target by 2020, which is significant given the growth in demand that overlays the amount capacity that must come on line in the next 12 years.

Within that US state, Southern California Edison has responded. From its Grid control center this company controls over 30,000MW in power representing more than half of the total Australia generation capacity. They are in the process today of bringing on another 4,000MW of wind energy from one project alone (as much as 6 large coal fired power stations) to complement their current renewables contracts of wind (1500MW in place), solar (500MW from Nevada - see pictures), biomass, geothermal and others (together with a healthy mix of co-generation). This is the mix that offers diversity of generation needed to sustain a base load dispatch capability with the % of renewable power to meet the aggressive targets. No one technology can currently provide sustainable green generation.

One thing is clear, most industrial advantage comes through innovation and if we stay with coal power in Australia we won’t have that industrial advantage moving forward. The Howard government in their economic heyday set us back in the long term. And we congratulated them.

In the 1960’s, when the Snowy Mountains scheme was finished, Australia was running at 20% renewable power. Now we are down to 8%. Coal has been the mainstay of Australia’s increased capacity. In 1993 an Australian senate recommendation to increase renewables was refused by the then Howard government. They set a mediocre 9000MW total renewable generation by 2010. Taken together with Australia’s growth in energy needs the country looks to slip back another 2% to a 6% total renewable mix by 2010. It may be necessary to tighten the belts to enable the investments necessary to transform Australian power generation base into a clean, green form of provision.

As I alluded to in the previous blog, most Australians are looking for our new federal government to show leadership in this area. California has shown how aggressive target setting can lead the distribution environment to engage in renewable contracts and also generator companies to invest in renewables and a viable energy source for the future. The future is looking brighter, given the political impetus, interest from the investment community, and guidance under the energy regulator NEMMCO. Given these factors Australia could leap forward to become one of the global renewable energy transformation leaders.