The global market for clean and renewable energy is set to be worth A$750 billion (£367bn) a year by 2016, according to the 2007 Ernst & Young Renewable Energy Country Attractiveness Indices. With a current growth of 20-30%, companies are looking for locations around the world for reliable and sustainable global energy markets to support growth strategies.

For its part, after a time in the renewable energy wilderness, Australia is fast becoming an energy market of growing interest to a wide range of renewable energy companies, a fact that is backed up by vast energy resources and opportunities; indeed the country's natural endowment of wind, solar, water and land resources provides it with an excellent base to develop the industry.

Current incentives for renewable energy projects

Australia's renewable energy sector is a key emerging industry, experiencing rapid market growth. According to Clean Energy Report 2007, from the Australian Business Council for Sustainable Energy 2007, the clean energy industry accounts for £2.8 bn in annual sales, over £196 million in exports, and the direct employment of over 20,000 people. International renewable energy companies are now active in Australia, in areas such as research, development and manufacturing.

Since being appointed in November 2007, the new Australian Government has signed the Kyoto Protocol on capping greenhouse gas, and set a target to cut Australia's greenhouse gas emissions by 60% of 2000 levels by 2050. In addition, a review is currently underway to help establish a carbon trading system and to set greenhouse gas emission targets for 2020.

To help develop, commercialise and deploy renewable energy in the country, the Government has also “pledged” to establish a £215m Renewable Energy Fund. And to achieve its goal of a 20% share for renewable energy in Australia's electricity supply by 2020, the Government has committed to increasing the mandatory renewables energy target (MRET) – from 9.5 TWh to 45 TWh in 2020.

Other assistance measures that have been announced include research and development support for renewable energy technologies, with A$150m (£73.5m) set aside by the Government

Case study: Victoria – hub of renewables activity

States such as Victoria have targeted renewables as a key part of developmental strategy, with some success, across the different sectors:

Wave technologies

Victoria-based firm Oceanlinx is one of four developers chosen to be involved in the UK's Wave Hub project, a large scale wave farm being developed off the coast of Cornwall by the South West of England Regional Development Agency.

The company has recently signed a Power Purchase Agreement with the Australian utility Integral Energy, and expects to be the first wave energy company to be connected to the commercial grid. Oceanlinx is also proposing a 27 MW wave energy facility near Portland in Victoria, where development is expected to take place towards the end of 2008.

Windpower

Australia as a whole has excellent wind resources by world standards. The southern coastline lies in the roaring forties, and hundreds of sites have average wind speeds of above 8 or even 9 m/s at 50 m above ground (the hub height of a modern wind generator).

At the end of 2006, Australia had installed electricity generation capacity from windpower of 817 MW, and nationally wind farms contribute about 1% of total electricity production.

Victoria's wind speeds average around 6.5m/s across the state, and 8m/s in coastal areas. Victoria has less than 200 MW of installed wind farms, and around 3 GW of projects in the planning stage. The 192 MW Waubra wind farm in Victoria, when completed in mid-2008, will be the largest wind farm in Australia. It is owned by the Spanish company Acciona.

Solar PV, geothermal and bioenergy

In February 2008, Victoria's Premier John Brumby announced that a Victorian Government seed grant of A$50m will help deliver a 154 MW solar PV power station in northern Victoria. TRUenergy is to invest A$290m in renewable energy company Solar Systems to build the solar PV plant, with construction due to begin in 2009. The company's investment follows on from A$50m contributed by the Victorian Government, and A$79.5m from the Commonwealth in 2006.

The project has delivered investment across the state – with solar PV modules made in Melbourne, a pilot stage in Bendigo and a large-scale power station in the state's North West.

Stage one of the project, due to commence later this year, will see the reconfiguration of solar dish technology into HCPV technology. This will include the installation, commissioning and testing of a 250 heliostat concentrator field, and two towers for a total of 2 MW electrical output. The project is anticipated to reach full capacity by 2013.

In addition to solar PV, several geothermal energy projects are also underway. In April 2007, five companies were awarded permits to search for geothermal energy in unexplored areas of Victoria. These firms committed A$64m over five years to explore geothermal energy sources.

And BioMax is undertaking a trial at Hazelwood power station, which uses algae to harness sunlight and some of the CO₂ emissions to create solids, which can in turn be converted into biodiesel and ethanol.

ETIS funding in Victoria

Victoria has set a long-term target to reduce greenhouse gas emissions by 60% compared to 2000 levels by 2050, and the Victorian Government has since 2005 committed funding to a range of low carbon technologies, including the following renewables projects:

• Up to A$50m has been committed for a 154 MW, A$420m solar electricity generation plant to be built by Solar Systems Generation in northwest Victoria. The Commonwealth Government has also committed up to A$79.5m to this project;
• A A$6m grant for a A$12m project headed by Melbourne University to develop and increase the efficiency of organic solar cells as an alternative to silicon based cells in the generation of solar PV power. The project could lead to the establishment of a centre of excellence in Victoria. The grant partners include: Monash University, CSIRO, Securency (including Innovia Films), BP Solar, Merck, Bluescope Steel and NanoVic;
• A A$650,000 grant for a A$1.3m project led by Monash University to research the recycling of waste plastics for the production of diesel fuel. Monash University will team with Ozmotech Pty to investigate the formation of aromatic compounds in the production of diesel, and the stringent standards around their use in the fuel;
• A A$250,000 grant for a A$500,000 project led by Australian Sustainable Industry Research Centre Ltd (ASIRC), based in the Latrobe Valley, to investigate the energy efficiency of solvent based fuel derived from recycling industrial liquid wastes. This research by ASIRC and Geocycle Pty Ltd will seek to reduce the amount of industrial liquid wastes going to landfill, and also partially substitute the fossil fuel requirements of the cement and other energy intensive industries.
• A A$1.2m grant for a A$2.92m project led by Melbourne University to look at the development of a hydrogen-fuelled car engine, and also the storage of hydrogen. The project team includes the Ford Motor Company of Australia, Haskel Australia Pty Ltd, and the Universities of North Florida, California (Berkley) and Delaware.