Thursday, 26 May 2011

Debate refuses to blow over

16 May 2011, Page: 29

IF all the wind farms on the drawing boards in Australia are actually built, they will require a capital outlay of about $25 billion plus billions more for high voltage transmission systems to link them to the power grid. A decade ago, just a few MWs of wind capacity was available nationally; if the full list of proposals is delivered, there would be a large increase from the 2000 MW capacity of 2010.

The Energy Supply Association of Australia's yearbook reveals there are 106 wind developments in various stages of construction and planning, with a total capacity of 12,300 MWs equal to all the present power generation in Queensland, the second largest state supply system.

Credit agency Fitch Ratings, in its annual review of the east coast power industry, forecasts that $10.5bn should be spent between now and 2015 on building wind farms in five states. The rush to wind power, it says, will be led by Victoria (2335 MW), followed by South Australia (1132 MW), NSW (923 MW), Tasmania (568 MW) and Queensland (341 MW).

The main driver for wind development is the federal government's renewable energy target, designed to see 20% of all electricity consumed coming from zero emission resources by 2020. The trend will be further reinforced if the government can succeed in introducing a carbon price. The RET system is structured to produce tradeable Renewable Energy Certificates that are the currency for suppliers. They receive both the RECs price and the selling price for wholesale energy in the east coast market.

Without the mandated use of renewable energy and the RECs value, wind farmers would be unable to beat generators using brown coal, black coal and gas for a place in the market. The biggest problem for wind farm developers is that, as a result of the government's inclusion of support for rooftop solar systems in the RET structure, the RECs market is glutted and its values are low, resulting in the incentive to build large scale renewable generation being undermined.

At present prices, the best the wind generators can get in the market is about $35 per MW on average from the wholesale pool as well as as from RECs, whereas they need $100 to $110 to be commercially viable. As a result, about $4bn worth of wind farm projects are stalled and the renewables industry is fretting that the 2020 target may not be attainable.

Price is not the only factor troubling wind developers. The fast expansion of wind farm construction has created a rising tide of community concern in rural areas. The Senate, whose community affairs reference committee is investigating the social and economic impact of rural wind farms, has received 884 submissions, many of them from people riled by the intrusion of wind generation into the countryside. When South Australia's Premier Mike Rann travelled to the state's mid north recently to open a new farm, he was greeted by demonstrators waving placards saying "We can't sleep".

Peta Ashworth, group leader of the CSIRO Science into Society project, told the Senate committee at a hearing in Canberra that public acceptance is a critical factor for the successful deployment of wind power. Opponents cited landscape change, visual amenity, noise impacts and poor local consultation by project managers as their key concerns. "It appears for wind to be successfully deployed, planning processes that are transparent and participatory from an early stage will be required", she said.

Developers, the Clean Energy Council and environmental lobbyists argue, in turn, that there is strong community support in regional areas for wind farm projects, and that standards and guidelines for development are among the most stringent in the world, that no adverse health effects have been scientifically demonstrated for people living near wind turbines and that there is no evidence wind generation reduces property values.

Approval processes, however, are mostly in the hands of state and territory jurisdictions and Victoria's new Coalition government, for example, is reassessing the rules for wind developments and has said it will give local councils more say in the process. Greenpeace told the committee that the potential for wind power was "enormous", claiming that government policy could be used to drive wind development much faster than at present, aiming for wind generation alone to meet 21% of demand by 2020, with the closure of 8500 MW of coal fired power plants.

Union Fenosa Wind Australia, a Spanish owned company, which has "well progressed" plans to build 1330 MW of wind capacity in Victoria and NSW, says global improvements in the technology are "continuing apace". Its development manager, Thomas Mitchell, has told the Senate in a submission that technological improvements in the past decade have made mechanical noise from turbines "almost undetectable". For farmers, he says, hosting wind generation provides a resource that can co exist with other commercial operations, and for many offers a means of drought proofing their business.