Power plan: credits, where they are due

Age
Thursday 5/10/2006, Page: 2

CLEAN energy retailers and brokers will tap into a new source of income from January 1, when renewable energy trading begins in Victoria.

Under the Victorian Renewable Energy Target scheme (VRET), companies generating environmentally friendly energy will earn credits, worth an estimated $35-$43 each, that electricity retailers must buy.

Clean-energy suppliers will earn credits for each megawatt hour of clean energy they generate. Once they have accumulated a quantity of certificates, they can them sell them to electricity retailers such as Australian Gas Light or Origin Energy.

The certificates provide renewable energy companies with a source of income in addition to what they gain from selling electricity. Under VRET, unless retailers buy 10 per cent of their electricity from clean suppliers they face a Government-imposed penalty, initially set at $43 for each missing certificate.

By 2016 the Government wants 10 per cent of the state's electricity consumption to be met by wind, hydro and other environmentally friendly power generation methods, reducing greenhouse emissions by about 27 million tonnes.

AGL emerging markets manager Marc Barrington said few consumers knew what VRET or the Federal Government's Mandatory Renewable Energy Target (MRET) schemes actually did. And Australian Business Council for Sustainable Energy (BCSE) executive director Riccardo Brazzale said that - despite the relative success of existing carbon markets and the introduction of Victoria's renewable energy market - more had to be done to manage global warming.

"We need to be more ambitious because the schemes we have in place are a really good start, but they're not even stabilising greenhouse emissions yet - greenhouse emissions are still rising," he said.

In its 2006 Carbon Markets Report, the BCSE said the VRET legislation passed by the Victorian Government places an obligation on electricity retailers to buy electricity from renewable sources. "The legislation is largely a carbon copy of the federal MRET legislation,'' the report stated.

Marianne Lourey, of the Department of Infrastructure's energy and security division, said that since VRET was locked in there had been announcements about four wind farm projects planned for Waubra, Naroghid near Camperdown, Mount Gellibrand near Colac and a community project in Hepburn. An announcement has also been made about a hydroelectric power station at Bogong in the state's north-east.

Once completed, these projects will begin earning VRET credits, which can then be sold on to energy retailers.

The latest polling from the Lowy Institute shows Australians care about climate change. Two thirds of respondents said global warming was a "serious and pressing problem".