FACTBOX - Australia's renewable energy sector

(Reuters) - Australia passed laws on Thursday requiring the generation of 20 percent of its electricity from renewable energy sources by 2020.

Experts forecast Australia needs to install around 11,000 megawatts of new capacity to meet the targets, possibly unleashing $22 billion in investment in the sector.

That means more than half of all of the country's new electricity generation capacity between now and 2020 will have to use renewable energy.

Following are some facts about Australia's renewable energy sector:

RENEWABLE ENERGY SYSTEMS

Wind power remains the cheapest form of renewable energy but is still at an early stage, with installed capacity at about 1.3 gigawatts (GW), or barely 3 percent of Australia's total installed capacity of 45 GW.

Solar power holds promise in a country known for its sunshine. Australia's solar credits program, which will subsidize the cost of households installing 1.5-kw solar power systems, and subsidized tariffs should help boost demand.

Australia may see increased investment in geothermal power, which taps heat trapped in granite 3 km or more below the earth's surface to run turbines and generate power. Studies suggest that Australia's hot fractured rock geothermal energy could provide up to 2,200 MW of base-load capacity, or up to 40 percent of the country's renewable target, entailing investment of about A$12 billion.

A rush to deploy proven technologies will be at the expense of geothermal and other emerging technologies including concentrated solar power and ocean energy, which require time and huge capital to develop.

ASSESSING COSTS

Renewable energy would require government subsidies for many years to make it cost competitive against fossil fuels. Marginal costs for wind and geothermal over the long-term would be about $100 per megawatt-hour and concentrated solar about $150 per MWh. Wave energy is estimated at about $225 a MWh.

Though costs are expected to trend downwards over time, competing with conventional electricity prices, currently at $30 to $50 per MWh, would be tough. Rising prices for carbon amid earth's limited supply of oil and gas could work toward making clean energy cost-competitive.

For now, the main challenge confronting the renewable energy sector would be securing funding for investment in building new projects. Fiscal stimuli directed toward boosting low carbon energy systems should ease industry's funding concerns.

WINNERS FROM EXPANDED TARGET

The best direct exposure to renewable energy in Australia is its wind companies such as Infigen Energy, formerly known as Babcock & Brown Wind Partners, analysts say.

Other companies with exposure to wind projects include Transfield Services Infrastructure and Viridis Clean Energy.

AGL Energy and Orgin Energy should benefit seeing renewable energy as a strategic priority. As Australia's largest power retailers, their interest in developing renewable energy, among others, is to offset their liabilities to purchase renewable energy certificates or RECs.

The solar segment is led by Dyesol Ltd. Other solar fuel cell technology companies include Silex.

Geothermal carries great growth potential. Geodynamics with a market capitalization of over A$290 million is the leader of the pack of about 8 companies in the sector, most with a capitalization of less than A$20 million.

Exposure to clean coal technology is through White Energy.

Coal bed methane technology, which uses the trapped methane in coal to produce gas, has been identified among technologies to benefit from the new law. Companies actively exploring coal bed methane includes Sydney Gas Ltd Queensland Gas Co and Origin Energy.

Exposure to Australia's wave energy can be made through investments in Carnegie Corp.

(Sources: Australian government, here;The Clean Energy Council, www.cleanenergycouncil.org.au; Auerbach Grayson Research, www.agco.com; McLennan Magasanik Associates, Wilson HTM as cited in Auerbach Grayson reports)

(Reporting by Leonora Walet; Editing by Nick Macfie)