While the country's total operational capacity increased only modestly to 824 MW at the end of 2007 from 651 MW a year earlier, projects due for commissioning this year should see operational capacity almost double to 1488 MW and another 400 MW are lined up with approval (table). Just three new projects came on line last year, all using Vestas turbines (table). Reporting the figures, which reveal some previous double counting of megawatts, is the Clean Energy Council (CEC), a new industry association formed by the merger of the Australian Wind Energy Association and Business Council for Sustainable Energy.
Much of the surge is down to the ushering in of a pro-renewables government in November's federal election. With John Howard's Conservatives replaced by Kevin Rudd's Labor Party, Australia's wind market instantly found itself on firmer foundations. Rudd came to power on the back of a promise to sign up to the UN's Kyoto Protocol for carbon emission reduction, which he honoured immediately, a 20% by 2020 renewable energy target, and the introduction of a cap and trade market for emissions as soon as possible.
"Before the election the hope was that both major political parties would call for a 20% by 2020 target," says Michael Vawser of developer Wind Prospect. "After the election we hope the Labor government will meet its promises rapidly during 2008." Under Labor's 20% by 2020 plan, it will increase the national mandatory renewable energy target (MRET) from the current 9500 GWh to 45,000 GWh in 2020, requiring around 10,000 MW of renewables capacity. Wind power is likely to supply the bulk of it. MRET will subsequently be phased out between 2020 and 2030, says the newly formed Department of Climate Change, to be replaced by a maturing emissions trading market that will drive up conventional energy prices, making renewables investment the more attractive option.
Translating the plans
The hard work of making Rudd's plans a reality is now underway. The formation of the CEC, says Pacific Hydro's Kate Summer, will help significantly. It "provides much better pulling power in both the policy area and the regulatory side," she says. "The next major challenge facing the industry will be to ensure that the new expanded renewable energy targets become bedded down in policy that will support investment in new projects," says the CEC's Dominique La Fontaine. "State programs have revived new project investment but there is a need to sustain and enhance the momentum through speedy implementation of legislation for the national scheme."
At a meeting of the Council of Australian Governments in December, the commonwealth and state governments -- all now Labor -- agreed to work together to bring about a successful transition of the various state market structures now driving the growth of wind power into Rudd's planned MRET by early 2009. An implementation plan is expected later this month.
Meanwhile the face of Australia's wind industry is also changing fast. "Now more than ever before, it appears that being an independent wind power producer will get harder and harder," notes Vawser. An influx of heavyweight players from the energy and banking industries serves to illustrate his point.
Australia's largest energy retailer, AGL, has bought the development rights to the 71 MW Hallett Hill wind farm, 200 kilometres north of Adelaide, from Wind Prospect and is also building the A$236 million, 95 MW Brown Hill wind farm about 20 kilometres away consisting of 45 Suzlon 2.1 MW turbines. The country's biggest green energy retailer, Origin Energy, has also made its first investment in becoming a serious wind farm owner (Windpower Monthly, February 2008). "Of the six dominant retail companies in Australia, three are up for sale and the other three are either developing their own projects or have solid relationships with individual developers," says Vawser.
From the investment banking sector, Investec is applying to build the 85 MW Oaklands Hill wind farm near Glenthompson in Western Victoria in a joint venture with Windlab Systems Pty Ltd. Similarly, Allco Wind Energy, a division of the infrastructure area of ASX-listed Allco Finance Group, has also emerged on the Australian wind scene. It has approval for a 124 MW, 75 turbine wind farm at Crows Nest in south-eastern Queensland, while its plans in the pipeline include 150-200 MW at Ben Lomond Farm in the northern tablelands region of New South Wales and the 180 MW Worlds End Wind Farm south-east of Burra in South Australia. "We now have a more positive outlook for the potential of the wind industry in Australia following the signing of the Kyoto protocol agreement," says the company's Steen Stavnsbo.
More needs to be done, however, to keep up the market momentum, adds Stavnsbo. "If Australia and New Zealand are to be considered anything but a fringe market, stronger support leading to a deeper market is required from all levels of government. This will ensure the supply of both capital and equipment in a world where demand is currently outstripping supply in these areas. In particular, power purchase agreements, transmission interconnection and permitting are currently the three areas of constraint."
Pacific Hydro's Summers agrees. "Grid top outs will come into play more and more as wind farms will be involved in constraint equations and dispatched down when constraints bind," she says. "The market in general is struggling to deliver the transmission solutions necessary to alleviate constraints in general."