$300m wind farm in West shelved

The Examiner, Page: 20
Friday, 12 May 2006

Renewable energy company Roaring 40s has pulled the pin on a $300 million wind farm in Tasmania's North-West because it says it is not commercially viable. The company withdrew its application approval for the Heemskirk wind farm from the West Coast Council yesterday and managing director Mark Kelleher said the Musselroe farm in the North-East is also in doubt. Last month the project looked shaky with a surprise ruling by Federal Environment Minister lan Campbell to quash a $220 million wind farm in Victoria after a report found it could threaten the survival of the endangered orange-bellied parrot. It cast doubt over the likelihood of the West Coast project gettingcrucial environmental approval, given the prevalence of the species in the area, and despite reassurances from Senator Campbell that each project would be considered on its merits.

But Mr Kelleher said it was not just the ruling that will led the company to back away from Heemskirk and Waterloo wind farm in South Australia and wind back all wind farm proposals in Australia. Mr Kelleher said the Federal Government's decision not to increasethe Mandatory Renewable Energy Target is to blame. MEET required 9500GHW or about 2 per cent of energy to be renewable by 2010. It means electricity retailers buy renewable energy certificates to meet these targets.

However, it is estimated that the targets will be met before the cut-off date - leavingcompanies like Roaring 40s without the financial incentive that enables them to sell their RECs and underpins the viability of projects. "It's just not going to be commercially viable because of the lack of offtake arrangements for RECs. And in view of the challenging set of approvals processes as well, we've decided it's in everybody's interest to not put any further effort into this at this stage," he said. He said the announcement comes after months of lobbying the Federal Government to increase the target level to at least 5 per cent.

Tasmanian Senator and Parliamentary Secretary Richard Colbeck expressed his disappointment that Heemskirk would not go ahead yesterday. However he said he stood by the Government's decision to maintain the current level of MRETs. He said increasing the target, which has cost $1 billion to date, would force the Government to pass on the cost to consumers through higher power bills. State Energy Minister David Llewellyn said the Federal Government's refusal to extend the scheme appeared to be favouring coal over renewable energy sources.

He is seeking an urgent meeting with Federal Industry Minister lan Macfarlane.