RET generates industry response

Weekend Australian
Saturday 22/5/2010 Page: 5

THE enlarged renewable energy target has seen an eight-fold increase in plans to build green generation in Australia, according to AGL Energy, with the dominant technology being wind power.

Speaking to a utilities conference, Jeff Dimery, AGL Energy's group general manager for merchant energy, said the small scale RET program implemented by the Howard government was estimated four years ago to lead to just 1200MWs of new renewable generation being developed this decade.

AGL Energy now expected 9500MW of renewable generation to be constructed by 2020 as a result of the Rudd government scheme requiring 20% of consumption to be zero emission by the end of the decade. This will see a $30 billion investment in new power production. However, Dimery said, the future of renewable development is critically dependent on the government winning passage of amending RET legislation to rectify flaws in the initial scheme before federal parliament rises for the winter recess. The improved RET has also changed the outlook for gas generation, according to Dimery.

Four years ago, AGL Energy expected 5500MW of close-cycle (baseload) gas turbines to be built this decade plus 4500MW of open cycle (peaking) plant. The outlook now is for 5500MW of peaking plant to be constructed by 2020 with new baseload gas capacity falling back to 2800MW.

Australia has a world-class wind resource, said Dimery, with especially good opportunities for the eastern seaboard, where more than 85% of demand is located, in Tasmania, South Australia and Victoria, but the best sites for wind farms in Tasmania and South Australia are already taken. AGL Energy has commissioned 71MW of wind power at Hallett in SA, with two other systems totalling 164MW under construction there and a further 54MW farm possible at the site. It is also looking at building a 130MW wind farm at Redhill in SA. The company has 69MW of wind generation under construction in Victoria and has made a conditional "under review."

At the same conference Karen Moses, executive director finance and strategy at Origin Energy, said the company's modelling suggests that more than 6000MW of new wind capacity will be built by 2020 in the absence of a competitive alternative renewable technology. Longterm, development of emerging geothermal technology could provide a further large-scale renewable energy source.

In the absence of a price on carbon, direct action maybe needed to provide an incentive for coal-fired generation to close, Moses said, but this approach needs to be "market-based, nondiscriminatory and non distortionary." With a delay to the emissions trading scheme, she also expects attention to shift to energy efficiency as a means to cut carbon emissions, but Origin Energy sees the "plethora" of state-based schemes as a barrier to progress. "Although introduced with good intentions in Victoria, SA and NSW, these schemes are inefficient and costly for consumers."