Incentives up and barriers down -- Western Australia legislation

A multi-million dollar package to kick-start renewable power development in Western Australia (WA) -- including a three year production incentive of A$0.01/kWh and a mandate on the state utility for purchase of green power credits -- has been announced by the state government. Together with legislation aimed at freeing the electricity market from near monopoly control by Western Power, the renewables package is expected to open up new opportunities for wind. The government has also said it will commission an independent study into how to get more wind power into the south-west electricity grid.

Western Australia's electricity reforms are designed to remove what state energy minister Eric Ripper describes as the "major obstacles to the development of the industry." Speaking at the opening of Western Power's 3.6 MW Nine Mile Beach wind farm at Esperance, 600 kilometres south-east of Perth, he added: "Western Power dominates power generation, and controls the power lines and the retailing of power, so it is difficult for green power producers to break into the market." That will change, he suggests, and "renewable energy operators will become a more important part of the energy marketplace."

Green credits

Projects can win the A$0.01/kWh production incentive for three years, or until mid-2007, whichever is sooner. At the same time, the new electricity legislation contains fairer balancing power regulations and grid access arrangements for renewables -- and all energy retailers will be required to disclose greenhouse gas emissions on power bills.

Subsidies are also being offered for new metres for domestic customers who want to offset their electricity consumption from the grid with their own green-power generation.

Significantly, renewable energy generators will also have the chance to supply Western Power with a further 100,000 renewable energy credits by 2006.

The utility is expected to call for expressions of interest in supplying the credits shortly. They will be worth around A$8 million a year. "Buying renewable energy credits in Western Australia (WA) helps Western Power meet its Federal renewable energy targets but it also gives the local renewable energy industry a much needed boost," the minister says. "The combination of these initiatives, and the planned reforms to the electricity market, will allow WA to properly harness its renewable energy resources."

The state could become a national leader in renewable energy use, Ripper believes. "We must embrace a genuinely competitive, dynamic, robust electricity system rather than settle for an electricity market that disadvantages consumers and strangles investment and job creation," he stresses. "More competition is needed to put downward pressure on prices and open up opportunities for private investment in power generation, including renewable energy producers."