Australia

Australia

No extension for mandatory target -- Prime minister ignores advice

The Australian wind industry is reassessing its future after Premier John Howard announced that the Mandatory Renewable Energy Target (MRET) -- for 9500 GWh of new renewable energy a year by 2010 -- will remain unchanged. "For the foreseeable future, coal, oil and gas will meet the bulk of Australia's energy needs," he says. Howard's decision to merely retain the MRET legislation rather than strengthen it goes against the recommendations of a recent government sponsored report, but still provides more market security for the wind industry than it has had to date.

Hundreds of megawatts of planned wind development, however, could now be scrapped, with the country's leading wind power developers warning that their intended investment beyond 2007 is unlikely to go ahead. From the turbine making industry, Svend Sigaard of Vestas confirms the company is "reconsidering" its plans for two new blades factories in Australia.

With its White Paper, Securing Australia's Energy Future, the Howard government appears particularly sceptical about the potential for wind power, frequently qualifying the word "wind" with "intermittent." Wind's variable supply is described as "a key impediment" in the White Paper, negating the findings of current research.

Howard is clearly unconvinced by the government's own report into the legislation (Windpower Monthly, February 2004). He rejects all of its key recommendations including increasing the target, extending its lifespan beyond 2020, and indexing penalty prices to inflation. These changes would have improved the viability of future projects and ensured wind industry development, according to the report. For Howard: "Expanding MRET would impose substantial new costs on the economy and would benefit too few technologies. A better path is to directly promote the development and demonstration of a broader range of low emission technologies."

To this end he introduces new funding, including A$34 million to target barriers to renewable energy uptake, such as the variable output from wind plant, accurate forecasts of wind output, poor grid connection rules, and lack of electricity storage. An A$500 million fund is to encourage investment in demonstrating low emission technologies across the full spectrum of energy sources. A further A$203 million is allocated for ongoing funding for low-emissions technology.

Dismayed

The wind industry, still waiting to hear all important details about grid and transmission improvements, is dismayed at the MRET stalemate. Hydro Tasmania's Geoff Willis calls it a blow to the company's wind investment past 2007. "While projects such as stage three of the Woolnorth wind farm and those planned for Heemskirk and Musselroe should be safe, future development locally and interstate will be stalled," he warns.

Pacific Hydro says its plans to develop 500-700 MW of wind power in Australia over the next four years will proceed, but other investment planned for Australia will go elsewhere in "fast growing international markets where renewable energy generation is supported." The company's Jeff Harding notes: "While state governments remain very strongly supportive of the renewable energy sector, the federal government's resistance to increasing MRET will result in a significant loss of accelerated Australian regional development opportunities."

Sigaard says he will stand by the company's plans for blade facilities in Tasmania and Victoria if, after further consideration, he is convinced of the long term prospects for the Australia market. "But against our expectations the Australian government has decided not to extend and increase the political demands for renewable energy. As a consequence we have to reconsider our factory plans since there no longer exists a stable market," he says.

Yesterday's man

The country's longest serving energy minister, South Australia's Patrick Conlon, is also deeply unhappy. "The federal government cannot fix emission issues by tinkering with renewable energy and fanciful notions of cleaning up coal generation of electricity," he says. "With no greenhouse policy, and no plan for Australia's environmental future, Mr Howard is yesterday's man setting us up for The Day After Tomorrow," he adds, referring to the Hollywood blockbuster which graphically illustrates the effects of global warming.

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