In defence of its decision to abandon the joint venture between the State Electricity Commission of Victoria (SECV), which has already spent at least A$500,000 developing the project, and preferred developer Australian Defence Industries (ADI), the government says the A$1.3 million yearly subsidy over 20 years was "not in the state's interest." A spokesperson for energy minister Jim Plowman says the government could not continue to justify a subsidy of A$25 million to an "uncommercial" project using limited new technology in light of the state's economic woes and 30% electricity over capacity. The cost of electricity from the wind farm would also be double that from current coal-fired power stations, he adds.
However, while cancelling the Toora wind plant, the Victorian government is planning to proceed with a 10 MW pilot combined cycle coal power station for A$100 million. The research on that technology has already cost A$25 million. Environmentalists point out that the wind farm was a demonstration project and never meant as a fully commercial operation. A significant portion of the budget, they say, was allocated for research and monitoring.
ADI says it is "extremely disappointed" and notes that the government made a firm commitment in June, 1993 to contract with ADI to build Australia's largest wind farm which would have reduced carbon dioxide emission by 32,000 tonnes a year and provided electricity for 5000 homes. ADI also says the government was well aware of the costs when the company was named preferred tenderer -- a price which would be outweighed by "significant environmental benefits." ADI was also the prime contractor for the recently completed 2.5 MW Ten Mile Lagoon wind farm at Esperance in West Australia which delivers energy at an estimated A$0.10/kWh. ADI says it will look at ways to continue the Toora project but will not comment further.
The Australian branch of environment organisation Greenpeace has condemned the government's decision, describing the removal of the proposed subsidy as "hypocritical" in light of public subsidies to the coal industry. "A short term subsidy for wind technology in Australia would ultimately establish a profitable renewable energy industry with export potential," says Greenpeace.
The minister's spokesperson says the government's decision was influenced by visual and noise impacts of wind farms, but Rod Lomax, CEO of South Gippsland Shire, where the wind farm was to have been located, calls the government's arguments "a white elephant." He adds: "It's totally incorrect -- those issues were dealt with in the planning process and have been resolved." He says the wind farm would have been a model for future greenhouse-friendly energy projects and necessary if Australia was to meet international commitments to reduce greenhouse gases.