Roaring 40s takes a tilt at Chinese market

The Age
28/08/2006 Page: 3

MARK Kelleher, chief executive of Roaring 40s, a wind-power joint venture between Hydro Tasmania and China Light and Power, feels personally what he sees as Australia's lack of a renewable energy policy.

"I'm disappointed, almost embarrassed," Mr Kelleher said. The federal mandated renewable energy target scheme was initially designed to boost renewable energy output by 2 per cent. But unexpected growth in power usage has whittled that back to 0.5 per cent - far below most other countries' targets.

"Compare that to 15 per cent for China, 10 per cent for India or 20 per cent in the UK and it looks pretty measly," Mr Kelleher said. "They (China and India) can afford it less than us."

While Britain needs to act to meet its Kyoto Protocol commitments, China and India, also signatories, have acted voluntarily as developing countries have no emissions reduction target in Kyoto's first round.

Australia has not signed Kyoto.

Hydra Tasmania, which had high hopes for wind in the island state, saw the writing on the wall when the Federal Government decided not to boost the MRET. Then chief executive Geoff Willis, seeing that wind development would wither in Australia, looked to China.

The result was the Roaring 40s. With Hydro Tasmania's expertise and CLP's money and contacts, the venture has so far been successful.

To date Roaring 40s has done two deals in China joint ventures with local power operators with another six under negotiation. It has a further two in India, is completing the last stage of its Woolnorth wind farm in Tasmania, and has plans for Victoria, following moves by the State Government to introduce its own renewables funding scheme.

"In the next two years, we look like doing something like 200 megawatts a year," Mr Kelleher said. "That's about $400 million a year, and our equity contribution will be $50 million a year." With the $110 million in cash that CLP brought to the joint venture now spent, Hydro Tasmania will have to stump up more capital for development.

Mr Kelleher says he has commitments for that. But ultimately Roaring 40s' growth rate may depend on whether the Tasmanian Government comes through with a $300 million capital injection for Hydro Tasmania.

Mr Kelleher has not given up on Australia and feels there may be a change in the political winds blowing from Canberra that could lead to a new mechanism to expand the renewables sector.

"I get a sense (Canberra) wants to do something while avoiding damaging impacts on the economy. So we've got some work to do to demonstrate (the viability of) our position," he said.