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Australia

Australia

Political chill puts freeze on optimism

Blue skies and winter sunshine greeted the 300 delegates gathered in Sydney for the seventh annual conference of the Australian Wind Energy Association (AusWEA), Auswind 2005, in mid August. The overall mood though was far chillier, with many warning the air has gone out of the country's wind balloon. The number of people attending this year's event was slightly down on the 320 last year, while just 23 companies exhibited compared with 27 in 2004.

In stark contrast to last year, 2005's annual gathering of Australia's wind industry saw members largely downbeat and despondent, although several speakers valiantly did their best to lift the spirits of delegates

Blue skies over Manly Beach and winter sunshine greeted the 300 delegates gathered in Sydney for the seventh annual conference of the Australian Wind Energy Association (AusWEA), Auswind 2005, in mid August. The overall mood though was far chillier, with many warning the air has gone out of the country's wind balloon. The number of people attending this year's event was slightly down on the 320 last year, while just 23 companies exhibited compared with 27 in 2004.

Last year the mood was defiantly optimistic in the face of regulatory disappointment, but this year the impact of the federal government's decision in June 2004 to leave the Mandatory Renewable Energy Target (MRET) at 9500 GWh by 2010 is being felt. Over the past 12 months developers have rushed to get their projects approved and the MRET target is filled, bringing plans for development post 2007 to a grinding halt. In total nearly 6000 MW of new wind plant is being planned, but most of this will not happen unless the MRET target is further increased or alternative legislation introduced, notes the association.

A dark cloud of concern for the medium and long term future of the industry hovered over the conference. As out-going AusWEA president Ian Lloyd Besson noted, the Australian market has some way to go it if it is to catch up with the rest of the world. "The [Australian] wind industry has come a long way in a short time with 471 MW of wind already installed," he said. At the close of 2003, total wind capacity was 198 MW, rising to 380 MW by the end of last year. "But the future beyond the end of the year is unclear," Lloyd Besson warned.

State hopes

"Without government support there is no Australian wind industry," warned Euan Cameron from project development company Wind Prospect's. But all is not necessarily lost, he added. "The present federal government is a lost cause," he conceded. Now it is up to the state governments, he said, reminding delegates that a state level initiative similar to MRET is still on the table for discussion. He admitted, however, that the initial enthusiasm for it expressed by state governments has died down.

Emissions trading is now being touted as the favoured way forward by the states, said David Nemtzow of the New South Wales energy department. Nemtzow worked for the US Wind Energy Association in the early 1980s and is remarkably buoyant about Australia's current situation. "Looking at MRET we are having a tough time with constitutional issues. But working on emissions trading, that is moving significantly," he said. "The state premiers are very committed to emissions trading." His attempt to lift the gloom, however, was not received particularly well by some. One delegate was heard to mutter back: "What can emissions trading do for us? Bugger all."

Nonetheless, state governments could, without doubt, hold the key to securing the Australian wind industry's future, pointed out Robert Hornung of the Canadian Wind Energy Association. Australia's wind sector is facing similar challenges experienced by the industry in Canada, he said. "The electricity system in Canada is all provincially based not federal and getting a national consensus is quite a challenge," he said. "We have gone to great pains in talking to the governments to take wind out of the climate change box." As a result, the industry has experienced rapid growth -- a 35% increase in installed capacity in 2004 when compared with the previous year, he noted. "We see this as the start of the boom," he said.

Attitude

The clear message from Hornung and others was for the Australian wind lobby to start thinking outside the box. "We need to think about what we can do," Euan Cameron said. "You have to cut your cloth to fit the shape of the market." Ian Mays of UK developer Renewable Energy Systems agreed. "It is clear MRET is not going to be changed. Is the sun rising on the industry or setting?" It comes down to attitude, he said. Australia's industry, he suggested, must be better prepared to service the Asia-Pacific region's wind energy needs. "Australia has great skills in civil engineering, electrical engineering, it has the potential to build wind turbines and components for wind turbines and to export some of those skills in project management and infrastructure to the rest of the region," he said. "Australia has a huge potential to be the hub of wind energy for the region."

Moving forward

Anthony Albanese, environment minister for the Labour party opposition to the government of Liberal Prime Minister John Howard, agreed. The key question facing the wind industry is "how we move forward," he said. "John Howard's refusal to ratify the Kyoto Protocol has meant that Australian companies such as the Macquarie Bank are investing in massive renewable energy projects in Europe. We must do better. Australia is missing out on $3 billion worth of investment due to the inertia of the federal government." Albanese has a Private Members Bill -- Avoiding Dangerous Climate Change (Kyoto Ratification) -- being debated in parliament. "It would amend the Environmental Protection, Biodiversity and Conservation Act to ensure the impact of major projects on greenhouse gas emissions is considered," he explained. "We need a regulatory framework that allows the market to operate with certainty. We need effective incentives to drive investment."

Grid challenges

Conference speakers also highlighted the ongoing need to deal with grid and transmission issues. "The wind energy boom has brought both challenges and benefits," said Garry Goddard of South Australia's new Energy Division within the Department for Transport Energy and Infrastructure. "Rapid growth is a problem for South Australia as it has gone from zero wind to potentially one of the highest sources of wind energy in the world."

Grid issues and the variability of wind station output, he said, are key challenges for the state. "South Australia does not have a densely meshed transmission network. It is a long thin network at the end of the National Electricity Market and the Electricity Supply Industry Planning Council has flagged up risks if wind penetration exceeds 500 MW," he said. The National Electricity Market (NEM) is the trading arena for wholesale supply and purchase of electricity in five Australian states and territories -- the Australian Capital Territory, New South Wales, Queensland, South Australia, and Victoria. Tasmania is due to join, via the underground Basslink in 2006.

An assessment by the electricity planning council suggests more than 700 MW of the 1260 MW proposed wind development seeking planning permission in the state since late 2004 is likely to remain on the drawing board for some time to come, added Margaret Cross of the Essential Services Commission of South Australia (ESCOSA). "In November 2004 ESCOSA indicated concerns regarding the impacts of high levels of wind. The underpinning conclusions are that there were grounds to reject all new wind farm applications until there are changes to the National Electricity Rules," she said. "There are proposals for interim or transitional licence conditions," she said, but if ESCOSA waits for the outcome of proposals to change the National Electricity Rules it could mean a delay in grid permits.

Bruce Cameron of the National Electricity Market Management Company agreed that high levels of wind would cause problems. Four key issues -- technical standards, modelling operational implications, forecasting and information disclosure -- face the industry, he said. A German consulting group, DigSILENT, was asked to perform specific modelling in South Australia (SA) to investigate operational implications for non-scheduled generation. "The findings are that high demand in SA will cause problems. It's okay at 400 MW but at 1200 MW there are problems," said Cameron.

Two weeks after the conference, NEM's management called for registrations of interest from parties who can offer proven solutions for generation forecasting from wind farms to cover an interim period until approximately mid-2007.

South Australia's neighbour, Victoria, also has some grid capacity issues to contend with but there are other problems too, according to the state's executive director for energy, Richard Bolt. "Our situation is similar to South Australia but we are better off because of our higher grid capacity," he explained. The Victorian grid system has a 500 kV back-bone as well as a 220 kV system, usually in parallel. South Australia's transmission line is 275 kV running the length of the state, with 132 kV in parallel. "However, we have more planning difficulties and the challenge is community acceptance," Bolt continued. "Victoria is a densely populated state and the lifestyle in the vicinity of wind farms is a consideration."

Community concerns

Dealing with community concerns is a key challenge in Australia, as in many other wind markets around the world. The British Wind Energy Association's Alison Hill provided a welcome breath of optimism on the subject. Sharing the lessons of the UK's Embrace the Wind campaign, she urged delegates to bust the myths about wind power. "If something is repeated often enough it enters the subconscious," she said. "The media portrayal continues to emphasise the myths. For many, wind turbines are a symbol of change and change is traumatic."

Ian Kiernan of campaign group, Clean Up Australia, agreed: "Let's not play down the impact of criticism. We must convince people that wind is here to stay." He added: "Turbines ugly? What could be uglier than climate change?" Large scale grid connected wind energy is the foundation needed to start addressing the threat of climate change, he said, stressing such solutions to climate change "should be viewed as a business opportunity."

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