Friday 13 March 2009

Victoria to get $100m solar energy plant Solar subsidy scheme to proceed

Age
Wednesday 11/3/2009 Page: 7

THE State Government will go ahead with a solar subsidy scheme condemned by some of its own experts as likely to do nothing to boost the take-up of solar panels. But the Government will promote renewable energy by spending $100 million to establish a new regional solar energy station, subject to the Federal Government matching its commitment.

Premier John Brumby announced both initiatives yesterday, focusing on the plan for a 330-gigawatt solar plant with the capacity to power the equivalent of 50,000 hones. The location of the plant will be decided through a tender process. The Government claimed that, combined with an existing proposal for a solar plant near Mildura, the new plant would make Victoria the most "solar friendly" state in Australia.

"Solar has huge potential in Victoria and large-scale solar is the most economical form of solar energy generation which is why we are providing this funding," he said. Mr Brumby confirmed that the Government would proceed with a subsidy for electricity generated by domestic photovoltaic solar panels, known as a net feed in tariff. Under the system, households will be paid a premium of 60 cents per kW hour for surplus power fed back into the electricity grid.

A more ambitious scheme known as a gross feed-in tariff involves premium payments to households, businesses and community groups for all the solar energy they produce. In January, The Age reported on confidential advice to Environment Minister Gavin Jennings from Department of Sustainability and Environmental policy executive director Fiona Williams, warning that the net scheme favoured by the Government would do nothing to encourage solar use.

Last year Energy Minister Peter Batchelor argued against the gross scheme, claiming it would add $100 a year to household power bills. But the leaked memo rejected this, saying the real impost would be $7 a year. The tariff has been altered to lift the subsidy cap from a mooted 2 kWs to 3.2 kWs an hour, making the scheme marginally more generous than the one flagged by the Government last year.

Environment Victoria welcomed the plan for a large scale solar plant but slammed the feed-in tariff plan. "Unfortunately this announcement seems designed to disguise that the Brumby Government has made only very minor amendments to its flawed solar feed-in tariff," campaign director Mark Wakeham said.

The tariff plan looks set for hostility in the state upper house, with Greens spokesman Greg Barber saying his party would seek to "green it up". Mr Brumby said his Government had brought forward the solar plant proposal to tap into funding under the Federal Government's renewable energy demonstration program.

Key points
  • New plant will produce enough electricity to power equivalent of 50,000 homes.
  • Location is subject to tender.
  • Green groups welcome plant, but slam "flawed" subsidies.

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