Hydro spend under fire

Hobart Mercury
Monday 15/2/2010 Page: 5

FINANCIAL help from Hydro Tasmania has allowed a wind farm in South Australia to go ahead while a similar project here has stalled. It has been revealed Hydro Tasmania underwrote Roaring 40s Waterloo windfarm in South Australia with joint venture partner TRUEnergy. Meanwhile, the Musselroe wind farm in Tasmania's far northeast has stalled indefinitely because of financing problems. Workers have not been told when, or if, construction will resume.

Liberal energy spokesman Peter Gutwein questioned the priorities of the state's energy generator. "The Government must explain why a Roaring 40s wind farm project in SA was able to be underwritten by Tasmanian GBE Hydro yet the Musselroe wind farm, worth more than $400 million, and a key northern project with hundreds of jobs attached to it, has still been unable to achieve financial close," Mr Gutwein said.

Hydro Tasmania purchased renewable energy certificates (RECs) and hedged electricity prices for the Waterloo project for 10 years to get it off the ground. Since then the market for RECs has dropped, making investment in wind energy uneconomic. Energy Minister David Llewellyn said he would not interfere with the dealings of a private company. He believed the Musselroe project would still be built.