Tasmania looks to fast-track take-up of electric vehicles to boost its credentials as a green manufacturing hub to replace old industries, and export clean energy to the mainland. Tasmania could end up totally renewable – a Green Apple Isle – in both electricity and transport.

Tasmania is looking closely at electric vehicles to take the next step towards 100 per cent renewable energy – both electricity and transport – and boost the state’s strategic advantage as a clean energy manufacturing hub.

The state government recently released its energy vision for the next 20 years, titled Tasmania’s Energy Strategy, Restoring Tasmania’s energy advantage”

Unlike the federal equivalent, the energy white paper, it did not focus on fossil fuels – Tasmania hasn’t much to speak of – but it did look to profit from its major natural resources, renewable energy in the form of hydro, wind and even solar.

What is fascinating about this paper is not so much the ambition – because, frankly, there is not a lot – but the recognition of the potential there is to exploit. A more progressive government faced with declining traditional industries, a huge fuel import bill, and such excellent renewable resources, and the potential to become a green energy manufacturing hub may think that it should be more ambitious. But at least it is a start.

Tasmania is already pretty much at 100 per cent renewable energy for its electricity needs, given the extent of its hydro plants and wind energy – both existing and potential. It also has more than 70MW of rooftop solar installed across the state.

But the Tasmanian economy faces a major issue with the threatened closure of some of its ageing and expensive manufacturing businesses. Four major industrial users account for more than one half of its electricity demand and their future is not certain.

That gives Tasmania one or two options. Either it tries to boost its exports to the mainland – Hydro Tasmania has previously suggested it could provide 1GW of “baseload” renewables to the Victorian market – or it boosts demand in its home market.

There are two ways of doing the latter. One is by transitioning to renewable energy transport, primarily through the deployment of electric vehicles. This would have the added benefit of reducing the transport fuel import bill, which currently stands at $1 billion a year, with significant energy security issues in the form of the supply chain.

Even big industries recognise the potential. Norske Skog, which operates the Boyer mill, said in its submission: “Of all the states in Australia, one might expect Tasmania should be at the forefront of implementation of electric vehicle technology.

“Most mainland users of electric or hybrid vehicles still require coal or gas-derived electricity as a basis for their vehicles fuel thus reducing some of the overall positive environmental effects these vehicles have.”

It said public transport could be a candidate for the utilisation of Tasmania’s renewable electricity source, particularly as local travel is generally over shorter distances.

“The large-scale uptake of electric vehicles could provide better utilisation of the electricity network as one might expect that vehicles would be charged overnight between peak demand periods.”

In its paper, the Tasmanian government says that EVs will create competition with liquid fuels and, therefore, reduce reliance and vulnerability to oil prices and supply.

They will also provide the opportunity to increase Tasmanian electricity load, re-shape demand and improve network utilisation (with appropriate market signals), which should lower prices for all customers.

The government says it is looking to deploy EVs in government fleets, and is providing incentives to have them deployed in private fleets too. This could provide education for consumers, and the market, for charging networks to be installed.

The other option is to try to attract new industrial load. That would mean selling Tasmania as a source of cheap green energy to industrial users.

“Tasmania should be more active in pursuing customers that value this attribute (renewable energy),” the document says.

“Energy intensive industries that may be attracted to Tasmania could include data centres, silica smelters, food processing, and irrigated cropping, to name but a few.

The government still has ambitions to increase its output to the mainland and is still considering a second inter-connector that could facilitate that, and boost its hydro energy output by around 10 per cent. This is notwithstanding its recent decision to discontinue the proposed 600MW wind farm on King Island and its associated connection to Victoria.

It notes that the emergence of battery storage could be a game changer that could lead to some customers choosing to to go ‘off grid’. But it does not appear certain about how to respond to this.

“Retail electricity prices have rapidly escalated, largely as a result of significantly increased investment in networks,” the study says.

“Consumers have responded to higher prices in a range of ways, including by investing in solar PV and energy efficiency measures, it notes.

“These responses have led to actual and forecast reduced levels of consumption, which is leading to concerns of a network ’death spiral’. This is compounded by tariff settings that are largely consumption based but the costs of providing the network are largely fixed.

Indeed, the Australian Energy Market Operator forecasts rooftop PV in Tasmania to jump four-fold over the next decade, from 70MW now to approximately 300MW by 2024, so this situation is likely to accelerate.

And it signals a big take-up of battery storage. “In addition, rapidly falling battery storage costs may cause some customers to consider disconnection from the grid,” it notes. “To the extent that this occurs, it will leave fewer customers to pay for the maintenance of the grid, resulting in even higher prices and driving even more customers off the grid.”

Of course, the introduction of battery storage could also add stability to the grid, and allow for greater integration of variable renewables such as wind and storage, as the government owned Hyrdo Tasmania is finding it its ground-breaking projects on King Island, and soon on Flinders Island.

Still, even though the government recognizes the potential of Tasmania’s clean energy resources, and its possible economic benefits, it still appears to be in “defence” mode on current industries and policies.