Clean power get a second wind

Ethical Investor
July, 2007 Page: 24

In 2006, new wind farms generated over AUS$27 billion globally. In Asia, wind energy will treble between now and 2010 with China installing ten times the wind energy of Australia. By the same token, we are likely to more than double our capacity over the same 3 year period. Australia's stationary energy sector is responsible for half of all our dangerous greenhouse gas emissions. So the wind energy industry owes its kick start to the Federal Government's early climate change policy.

The MRET scheme (Mandatory Renewable Energy Target), required electricity retailers to buy up to 9500 Megawatt hours of new, zero emission electricity from 2001. It was a nice touch, announced just before Kyoto, but by 2004 the MRET was met and a thriving industry began to wane. Three years on, thanks to state governments introducing their own clean energy targets, large scale wind energy projects are back on the agenda coast to coast.

With clean energy targets to meet, investors get the signal they need to drive the capacity building in the sector. And together with energy efficiency measures, clean energy infrastructure will help our economy evolve for a carbon conscious future. A clean energy market is essential until there's a fair price on carbon emissions, otherwise fossil fuel power will always be cheaper than renewables, making significant investment unlikely.

Australia is the lucky country when it comes to clean power. Our wind resource is often four times the strength of Europe's leading wind energy nations. Along with the intensity of wind, the size of our continent means we can easily accommodate a thriving, clean, safe energy industry that saves over 11,600 megalitres of drinking water and around 8,000 tonnes of climate changing greenhouse gas for every single operating turbine. Last month, the Victorian Government announced its new water desalination plant's emissions would be offset by adding new wind farms to the state's grid.

Many of us are already indirect investors in green power. A few years ago a group of industry super funds purchased an international wind and hydro developer. Other super funds are also looking for clean energy investments as a way of securing long term returns and a healthy environment for members. For super funds, looking after millions of 'mum & dad' retirement earnings, the balance is tipping towards sustainable, clean energy investments, particularly with the impending price on carbon.

It may take decades for the carbon price alone to bring parity to the energy market, making clean energy projects more attractive. The Federal Government is promising an emissions trading scheme (ETS) in 2012, the Opposition in 2011, while the States will be ready to go in 2010. However an ETS alone will not provide the incentive investors need to choose zero-emission projects today. Only the combination of a clean energy market and an emissions market will change our investment and consumption behaviour now and into the future.