Wind power has passed coal-seam gas as a source of angst in the community amid warnings the building of wind farms will have to increase more than threefold to meet the government’s renewable energy target.
One of the nation’s biggest energy companies, EnergyAustralia, has told the Climate Change Authority that the average of 300 megawatts of wind farms installed each year is “already testing the limits of community acceptance”, but the new construction rate for large-scale renewable projects would have to increase to about 930MW a year to meet the mandatory 2020 target.
The company warns there is a “high” risk with such a rapid roll-out that if projects are not installed quickly enough, a penalty will be triggered and consumers would be forced to pay for it.
EnergyAustralia chief executive Richard McIndoe said “the social licence” wasn’t there to ramp up construction of wind farms so rapidly.
The warning comes as Origin Energy – which is spending billions of dollars on coal-seam gas projects – reveals the community backlash over wind farms is surpassing opposition to coal-seam gas mining.
Origin’s executive general manager of corporate affairs, Phil Craig, said yesterday: “We get more letters of complaint today from local communities and interest groups about wind farm development than we do about coal-seam gas. “You’ve got on the one side, people saying, ‘do this, do it bigger, build wind’. Then you’ve got a whole lot of people complaining about wind . . . There are a whole lot of questions around, can you even do this?”
Origin has told the Climate Change Authority in a new submission that it will be “very difficult” to approve and construct the new renewable generation required under the scheme by 2020.
In a new submission, Origin says that of about 9000MW required to meet the large-scale renewable energy target of 41,000 gigawatt hours by 2020, only about a third of this is at the “under construction” or “approved” phase.
The company has told the authority that there has been “considerable public concern with large wind farms” and that one project in Victoria has recently been rejected.
The new submissions by the utilities – in response to the Climate Change Authority’s recommendation not to alter the target for energy from large-scale renewable projects – are all the more significant as EnergyAustralia and Origin are both major investors in renewable energy.
Last night, a spokesman for Climate Change Minister Greg Combet said the authority’s independent advice was that the renewable energy targets were likely to be met, and warned state governments that they would miss out on their share of renewable energy investment and clean energy jobs if they had unduly restrictive planning arrangements.
While Labor and the opposition are committed to the 2020 target and the Greens want the target increased, Labor’s chief whip and former cabinet minister Joel Fitzgibbon has said the target should be cut to give households relief from skyrocketing electricity prices.
Opposition to wind farms has centred on the health impacts of the low-frequency noise generated by turbines.
Last week, protesters descended on Parliament House in Canberra to claim they were “wind refugees” and to back a bill introduced by independent senator Nick Xenophon and Democratic Labor Party counterpart John Madigan that would deny certification to wind farms that exceeded normal background noise by more than 10 decibels.
Globally, debate is also raging about the cost to consumers because of government incentives for renewables such as wind farms and governments in some nations – particularly in Europe – have slashed subsidies.
International Energy Agency executive director Maria van der Hoeven yesterday told a conference in Sydney that last year, renewables received $US88 billion in subsidies, a rise of 24 per cent on the year before.
Ms van der Hoeven said that renewable energy was at a crossroads “as some governments look at the undoubted benefits, yes, but also look critically at how renewables are being supported and how much that is costing”.
Mr McIndoe said the risk with Australia’s existing RET was that “we are just going to end up falling flat on our face from a social licence perspective” because “the social licence isn’t there” to ramp up construction of wind farms.
“Why are we aiming towards what is clearly going to be an unsustainable program of forcing in wind that communities are not going to accept in such a short period of time?” Mr McIndoe said.
In its new submission, EnergyAustralia warns that if the large-scale renewable generation projects fail to be installed quickly enough to satisfy annual RET requirements, the scheme will trigger a legislated penalty of a shortfall charge of $65 per megawatt-hour (or $93 pre-tax) that is much higher than the $35 that large-scale generation certificates are expected to average this year. “The RET’s entire viability will come into question if energy consumers are forced to pay the penalty without delivery of additional renewable energy,” the submission says. “Renewable project investors will also be adversely impacted by scheme failure and their confidence in the scheme damaged, perhaps irreparably.”
The company says the Climate Change Authority’s modelling shows that changing the RET target – so that it is restored to a “real” 20 per cent by 2020, rather than a fixed target that is likely to see about 25 per cent of electricity generation come from renewables – would lower the cost to energy consumers.
According to EnergyAustralia, there is about 1200MW of wind generation in South Australia, and it is close to saturation. This means new wind farms are likely to be concentrated in Victoria – where the Baillieu government applies a 2km exclusion zone – and the O’Farrell government in NSW has reviewed restrictions.
Queensland has limited wind resources and Tasmania has limited demand and is constrained in exporting to the mainland.
Mr Combet’s spokesman said that the Climate Change Authority’s recent discussion paper “noted that there is a strong pipeline of wind projects and, with a carbon price in place, considered that the targets are likely to be met”. “Experience with market mechanisms in the past is that they have over, rather than under, delivered,” Mr Combet’s spokesman said.
“It is important to understand that under Labor the renewable energy target is working with the carbon price, $10bn Clean Energy Finance Corporation and $3.2bn Australian Renewable Energy Agency to deliver substantial renewable energy investment.”